Word of the day: Amortization
Amortization is the gradual repayment of a debt over a set period of time. Examples include a monthly mortgage payment, student loan, or a credit card balance.
In order to amortize a loan, your payments must be big enough to pay the accrued interest and reduce the principal.
Fun fact: The origin of the word amortize means “to kill,” according to Merriam-Webster.