When a loan is amortized,the largest portion of the periodic payment goes to reduce principal in the early years of the loan such that the accumulated interest can be spread out over the life of the loan.

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In the early years of an amortized loan, the largest portion of the periodic payment is typically allocated towards interest, not principal. As time progresses, the portion of the payment going towards the principal increases.

When a Loan Is Amortized,the Largest Portion of the Periodic