finance
fully amortized loan
A fully amortized loan is repaid in full through equal periodic payments that cover both interest and principal over the loan term, leaving a zero balance at the end. Early payments are mostly interest, while later payments go mostly toward principal. Most standard 15-year and 30-year fixed-rate mortgages are fully amortized loans.
- Exam tip
- Contrast with partially amortized loans, which leave a balloon payment, and interest-only loans, which repay no principal during the interest-only period.
- Example
- A $200,000, 30-year fixed loan at 6 percent has a principal and interest payment of about $1,199 per month and is paid off after 360 payments.
Related terms & state variants
Sources
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Last verified: 2026-10-23