BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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It is a table that gives details of the periodic principal and interest payments on a loan and the
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It is convenient for borrowers who are in the beginning of their careers.
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It is the schedule at which commercial banks charge their customers who are most creditworthy.
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All of the Above
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Detailed explanation-1: -A loan amortization schedule is a table that shows each periodic loan payment that is owed, typically monthly, for level-payment loans. The schedule breaks down how much of each payment is designated for the interest versus the principal.
Detailed explanation-2: -The term ‘amortization’ means repayment of debt by way of fixed payments over a specified duration. An amortization schedule refers to a detailed table of recurring loan payments that contains a bifurcation of the principal component and the interest charged in an EMI till the loan is completely repaid.
Detailed explanation-3: -Understanding Amortization First, amortization is used in the process of paying off debt through regular principal and interest payments over time. An amortization schedule is used to reduce the current balance on a loan-for example, a mortgage or a car loan-through installment payments.
Detailed explanation-4: -Amortization is how lenders are able to charge interest on a loan while keeping payments at a fixed amount throughout the life of the loan. Your monthly payments cover both interest and principal, with the interest payments becoming increasingly smaller over the payment term.