aflossingslening

An aflossingslening, or amortizing loan, is a type of loan where the borrower repays the principal amount borrowed, along with interest, over a set period through regular installments. Each payment made reduces the outstanding loan balance. Typically, early payments consist of a larger proportion of interest and a smaller proportion of principal, while later payments shift to a larger proportion of principal and a smaller proportion of interest. This gradual repayment structure is common for various types of loans, including mortgages, auto loans, and personal loans. The total amount paid back over the life of the loan will exceed the original principal due to the accrued interest. The terms of an aflossingslening, such as the interest rate, repayment period, and installment amount, are agreed upon by the lender and borrower at the outset. This predictable repayment schedule allows borrowers to budget effectively for their debt obligations.