Question 1

What is the difference between amortization and depreciation?

Accepted Answer

Amortization refers to paying off a debt (like a mortgage or loan) through scheduled installments over time. Depreciation refers to the reduction in value of a physical asset (like a car, machine, or building) over time due to wear, age, or obsolescence. In accounting, depreciation is also "amortized" as an expense — but in everyday personal finance, amortization means loan repayment.

Question 2

Can I pay off an amortized loan early?

Accepted Answer

Yes, in most cases — but verify whether your loan has a prepayment penalty. Many mortgages and auto loans now allow early payoff with no penalty. Extra payments made on top of your regular payment are typically applied to the principal balance, reducing future interest. Contact your lender to confirm that extra payments reduce the principal, not just future monthly payments.

Question 3

Does the amortization schedule change if I make extra payments?

Accepted Answer

Yes. Extra principal payments reduce the outstanding balance faster, which means less interest accrues in subsequent months. The required monthly payment amount remains the same, but the loan pays off earlier than the original schedule. Some lenders will recalculate ("recast") your payment after a large lump-sum payment — ask your lender about this option.

Question 4

What is the difference between the interest rate and APR on a loan?

Accepted Answer

The interest rate is the annual percentage charged on the outstanding loan balance. The APR (Annual Percentage Rate) includes the interest rate plus other borrowing costs — origination fees, discount points, mortgage insurance, and certain closing costs — expressed as an annual rate. APR is always equal to or higher than the interest rate and is the better comparison tool between loan offers with different fee structures.

Question 5

How does refinancing affect my amortization schedule?

Accepted Answer

Refinancing replaces your existing loan with a new one — effectively restarting the amortization clock. Even at a lower rate, refinancing to a 30-year mortgage when you're 10 years into your original 30-year loan means 40 total years of payments instead of 30. Calculate total interest paid on both scenarios, not just the monthly payment change. Sometimes refinancing to a 15-year term at a lower rate produces the best outcome.

Question 6

What percentage of my mortgage payment is tax deductible?

Accepted Answer

The interest portion of your mortgage payment is potentially deductible on U.S. federal taxes if you itemize deductions (Schedule A). The principal portion is never deductible. In early years, 80–85%+ of your payment is interest, so the deduction can be substantial. However, the 2017 Tax Cuts and Jobs Act nearly doubled the standard deduction, meaning most homeowners no longer benefit from itemizing. Consult a tax advisor for your specific situation.

Question 7

Is a 15-year or 30-year mortgage better?

Accepted Answer

A 15-year mortgage has a higher monthly payment but a significantly lower interest rate and dramatically less total interest paid. A 30-year mortgage has lower required payments and more flexibility (you can always pay extra, but you're not obligated to). The 15-year is mathematically superior if you can comfortably afford the higher payment. The 30-year makes sense if the payment difference would be invested at a higher return than your mortgage rate.

Question 8

What happens if I miss a loan payment?

Accepted Answer

Missing a payment typically triggers a late fee (often $25–50 or 5% of payment, whichever is greater) and a negative mark on your credit report if reported (usually after 30 days late). For mortgages, a formal foreclosure process begins only after 3–6 months of missed payments, but delinquency marks appear sooner. Contact your lender before missing a payment — most have hardship or deferral programs, and proactive communication prevents the worst outcomes.

Năm	Lãi Trả Hàng Năm	Gốc Trả Hàng Năm	Số Dư Cuối Năm
1	$19.388	$3.344	$296.656
5	$18.806	$3.926	$280.838
10	$17.805	$4.927	$257.148
15	$16.419	$6.313	$227.064
20	$14.512	$8.220	$187.629
25	$11.863	$10.869	$134.980
30	—	—	$0 (đã thanh toán xong)

Loại Khoản Vay	Phương Thức Khấu Hao	Đặc Điểm Chính
Thế Chấp Lãi Suất Cố Định	Khấu hao tiêu chuẩn	Cùng khoản thanh toán mỗi tháng; có thể dự đoán
Thế Chấp Lãi Suất Điều Chỉnh (ARM)	Tái khấu hao ở mỗi lần điều chỉnh lãi suất	Khoản thanh toán thay đổi khi lãi suất đặt lại
Khoản Vay Chỉ Lãi	Không hoàn trả gốc ban đầu	Khoản thanh toán ban đầu thấp hơn; không xây dựng vốn chủ
Khoản Vay Bong Bóng	Khấu hao một phần + khoản thanh toán cuối lớn	Thanh toán hàng tháng thấp; khoản tiền lớn đến hạn khi đáo hạn
Khoản Vay Mua Ô Tô	Khấu hao tiêu chuẩn	Thường 36–72 tháng; tài sản mất giá

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