What is car loan amortization?

I want to finance a car, but I've read that I need to look at my car loan amortization. What does this mean?

Answer
Amortization is an accountant’s word for describing how your car loan gets paid off. In an amortizing loan, each payment you make goes partially toward principal and partially toward interest.
Over time, the amount of interest you pay gets less and less as the overall balance of the car loan decreases.
An amortization schedule shows how much your interest and principal decrease over time, which is a handy thing to have if you’re interested in how much you’re actually paying over the life of the loan.
While car insurance doesn’t have an amortization schedule, it’s equally as important to have while you’re paying down your car loan. Using the Jerry app, you can get the best rate for your car insurance while protecting the investment you’re so diligently paying off.
Eric Schad
Answered on Nov 11, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
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