What does amortised mean?
The term amortised refers to the process of paying off a debt or loan gradually, typically by making regular payments. This concept is commonly used in finance, particularly in the context of mortgages, loans, and other financial instruments. Amortisation involves spreading the cost of a loan or debt over a period of time, making it more manageable for the borrower. This process can be applied to various types of debts, including mortgages, car loans, and credit card debt. Amortisation is an essential concept in finance, as it helps individuals and businesses manage their debt and make regular payments. The process of amortisation can be complex, involving various factors such as interest rates, loan terms, and repayment schedules. However, it is a crucial aspect of financial planning and management, enabling individuals and businesses to pay off their debts over time. By understanding amortisation, individuals can make informed decisions about their financial obligations and develop effective strategies for managing their debt.
verbTo pay off (a debt, loan, etc.) gradually, typically by making regular payments.
- To pay off (a debt, loan, etc.) gradually, typically by making regular payments.
"The company amortised the loan over a period of five years."
"The company amortised the loan over a period of five years."
"The government amortised the cost of the project over several years."
Reviewed by Deb Chak, Editor. AI-assisted content curated by RJS Tech Solutions LLP.
Etymology of amortised
The word amortised is derived from the French word 'amortir', which means 'to kill' or 'to destroy'. However, in the context of finance, the term has evolved to refer to the process of gradually paying off a debt or loan. The concept of amortisation has its roots in medieval Europe, where it was used to describe the process of paying off a mortgage or other debt over a period of time.
How amortised is actually used
In finance, amortisation refers to the process of gradually paying off a debt or loan. It is often used in the context of mortgages, loans, and other financial instruments.