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How to Amortize a Loan. Many loans, such as to purchase a house or a new car, involve amortization. To amortize a loan, you divide the principal borrowed plus interest into a set number of identical monthly payments. Over the lifetime of.
What Is the Difference Between an Amortized Home Loan & a Non-Amortized Home Loan?. When you borrow money to finance a home, you eventually have to pay that money back. The term amortization is an.