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Understanding Amortization: A Guide to Managing Your Debt

The article from MSN Money titled "Understanding Amortization: A Guide to Managing Your Debt" explains the concept of loan amortization, which is the process of paying off a debt over time through regular payments. It details how each payment covers both interest and principal, with early payments primarily reducing interest while later payments increasingly reduce the principal. The piece discusses the benefits of understanding amortization schedules, which show how much of each payment goes towards interest versus principal, helping borrowers see how their debt decreases over time. It also covers how making extra payments can shorten the loan term and reduce total interest paid. Additionally, the article touches on different types of loans like fixed-rate and adjustable-rate mortgages, and how amortization works differently in each case. It emphasizes the importance of this knowledge for effective debt management and financial planning.

Read the Full MSN Article at:
[ https://www.msn.com/en-us/money/other/understanding-amortization-a-guide-to-managing-your-debt/ar-AA1xtsRj ]