The Amortization Date is the maturity term of a debt or a derivative, therefore, as of that date, the debt for the repayment of the money would be extinguished.
Let’s see its formal definition, what is a loan amortization table and the mandatory insurance for applying for a loan
What is the Amortization Date?
We can define the concept of “Amortize a Loan” as the return of the money that we have borrowed from a lender, plus the interest that has been generated for the duration of the loan.
Therefore, the ways to repay a loan will be the amount loaned plus the interest that has been established in the contract, normally it will be made by monthly payments.
What is the Amortization Table of a loan?
The Amortization Table will allow you to know how your debt is decreasing as the agreed maturities arrive.
Each monthly installment will be made up of the capital and interest for having obtained that loan, as the duration of the loan progresses, you will pay less interest and more capital, as long as you have a fixed interest rate.
Suppose that they have lent us 6,000 euros at a fixed rate of 3%, and that we will return it in 24 monthly installments, where the fixed installment will be 300 euros, where the first installment would be made up of 250 euros of capital and 50 euros of interest.
What insurance is mandatory when applying for a loan?
Mainly, the loans that are linked to life insurance are usually mortgage, since it covers the borrower in the event of death or permanent disability.
This insurance will be linked to the debt that we have contracted with the financial institution, since the company must be in charge of paying the money owed, if the death of the owner occurs.