The process of making regular payments that reduce the principal loan balance is called:

Question

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Amortizing the loan means making regular payments that reduce the principal loan balance over time. This is commonly done with mortgages and car loans where the borrower pays a portion of the principal along with interest each month until the loan is fully paid off. The other choices do not accurately describe the process of repaying a loan.

The Process of Making Regular Payments That Reduce the Principal