Amortization
Paying off a loan with equal payments over time, where early payments are mostly interest and later ones are mostly principal.
Mortgages, car loans and many personal loans are amortized. The payment stays the same, but the split changes. Interest is charged on the remaining balance, so as the balance shrinks, more of each payment goes to principal.
An amortization schedule lists every payment and its split. It shows why extra payments early in a loan save the most interest. Credit cards are not amortized this way, since the balance changes as you spend.
Example
A $200,000 loan at 6% for 30 years has a payment of about $1,199.10. In month 1, interest is $200,000 × 6% ÷ 12 = $1,000, so $1,199.10 − $1,000 = $199.10 goes to principal.