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Watch a typical fixed-rate, level-payment loan over time.

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Amortization means scheduled payments reduce the loan's principal balance while

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also paying interest.

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Our bars show illustrative payment proportions, not a specific loan

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quote.

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Early on, more of the payment goes to interest.

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As principal falls, the interest portion usually shrinks and the

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principal portion grows.

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A fully amortizing loan reaches a zero balance at maturity

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if paid as scheduled.

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A partially amortizing loan leaves a balance to be paid

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at the end.

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Do not assume every scheduled payment goes entirely toward principal.

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Quick check:

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does the entire payment ordinarily reduce principal?

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No.

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Payments generally include both principal and interest.