Accelerated Amortization is a method of paying off a loan or debt in a shorter period of time than the original loan term. This is achieved by increasing the amount of principal payments made each month, which reduces the amount of interest paid over the life of the loan. This method is often used to save money on interest payments and to pay off debt faster.
Accelerated amortization refers to a method of repaying a loan or debt in a shorter period of time than originally agreed upon. This method involves making larger payments towards the principal amount, which reduces the outstanding balance more quickly and results in the loan being paid off faster. Accelerated amortization can be beneficial for borrowers as it helps them save on interest costs and become debt-free sooner. However, it is important to note that not all loan agreements allow for accelerated amortization, and borrowers should review their loan contracts to determine if this option is available to them. Additionally, some lenders may charge prepayment penalties or fees for early repayment, so borrowers should consider these factors before opting for accelerated amortization.
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This glossary post was last updated: 29th March 2024.
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