Amortization can refer to the process of paying off debt over time in regular installments of interest and principal sufficient to repay the loan in full by its maturity date. With mortgage and auto loan payments, a higher percentage of the flat monthly payment goes toward interest early in the loan.Click to see full answer. Also to know is, how does an amortizing loan work?Amortization is the process of spreading out a loan into a series of fixed payments over time. You’ll be paying off the loan’s interest and principal in different amounts each month, although your total payment remains equal each period. Reducing your loan balance (also known as paying off the loan principal).Also Know, what is the meaning of loan amortization? In banking and finance, an amortizing loan is a loan where the principal of the loan is paid down over the life of the loan (that is, amortized) according to an amortization schedule, typically through equal payments. Each payment to the lender will consist of a portion of interest and a portion of principal. Beside this, what is an example of amortization? Amortization is the process of incrementally charging the cost of an asset to expense over its expected period of use, which shifts the asset from the balance sheet to the income statement. Examples of intangible assets are patents, copyrights, taxi licenses, and trademarks.What is the loan amortization formula?The new Balance is calculated by subtracting the Principal from the previous balance. An amortization schedule normally will show you how much interest and principal you are paying each period, and usually an amortization calculator will also calculate the total interest paid over the life of the loan.