Amortization is the process of the elimination of debt with periodic payments made over time.

In simple words, if you are making regular repayments on your loan, a portion of your payment is covering the principal amount and the other portion is covering the interest component. If you are ‘amortizing’ your loan properly, with the passage of time a greater portion of your loan will cover the repayment of your principal, and the interest payment will be reduced.

There are a lot of free amortization calculators available online these days. You can either make best use of them or you can ask your lender to give you your amortization schedule and wrap your head around the numbers to see how best you can keep your debt component at a minimum.