Term vs Amortization
Quick Summary
Term is contract length; amortization is payment schedule length.
ELI5 Explanation
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Term is how long your current deal lasts, amortization is how long payoff math runs.
Detailed Explanation
Private loans commonly have short terms (6-24 months) with long amortization assumptions. At term end, outstanding principal is still large and must be refinanced or repaid.
Example
A one-year term with 30-year amortization still leaves nearly all principal due after 12 months.
Why It Matters
Confusing these can lead to cash-flow and maturity surprises.