The loan amortization period is the length of time required to repay a loan in full, including both its principal and interest.
For example, a restaurant owner finances $120,000 in kitchen equipment with a 7-year amortization period, meaning the loan balance — plus interest — will be fully paid off after 84 monthly payments.
Why it matters: It determines the timeline for debt repayment, directly affecting the size of monthly payments and total interest paid over the life of the loan.
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