Amortization Legal Meaning and Definition

Here is a simplified definition of the legal term Amortization.

Amortization (noun)

1. In a broader financial context, amortization refers to the gradual reduction of a debt over a specific period of time through regular payments. These payments typically include both principal and interest.

2. In the context of intangible assets, amortization can also refer to the process of expensing the cost of an intangible asset over its useful lifespan.

Example in a sentence: The mortgage loan will be fully paid off through amortization over 30 years.