Personal Finance Word of the Day: What Does Amortization Mean?

Personal Finance Word of the Day: Amortization

2. Reduce debt

Consumer Reports has found that in late 2011, 14 million Americans were still paying off their holiday bills from 2010. If you haven't been able to get out of credit card debt on your own, try boosting your financial fitness by joining a free financial boot camp offered online like This practical, step-by-step program, which I help lead with a team of experts, will help you reduce debt, figure out how to save money and reach a host of financial goals, including all of the financial New Year’s resolutions on this list.

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.