The depreciation in loans to the gradual repayment of capital including interest through the regular payment of a certain number of installments.

This is a prospectus which outlines the schedule of installments, the amounts of principal and interest, the debt repaid, and the outstanding debt.

There is a particular form of amortization of loans, the grace with which they are paid a certain number of installments for a period of interest-only; this allows you to have an installment of an amount reduced, but increased weight gradually over the period Mutual and maximum result at the end.

There are several types of depreciation, the most widespread and used by credit institutions is due to the depreciation French, and allows for greater protection in the event of early repayment of the loan, because the rate are all the same amount, and the calculation of interest is made on outstanding debt. The effect of this type of depreciation is that in the interest rate decreases and the share capital increases as they are paid, you will have with a prevalence rate of interest in the first period, and the prevalence of capital repayment in the second period.

The rate consists of a constant share capital (total debt divided by total rate) and a decreasing interest, interest is calculated on the first installment on debt finance, and in the following installments on outstanding debt.

There are other forms of depreciation with a variable rate or variable period; they are set by banks according to the type of loan.