Fully Amortized Loan

Fixed Rate, Fully amortized loans are paid according to an amortization schedule. Each month through the life of the loan a fixed payment is made towards the principal and interest of the loan amount. While the total paid each month always remains the same, the amount allocated towards the outstanding principal and the interest changes with each payment. With each successive payment, more of the money is allocated towards the principal as the loan amount is paid down.