Amortized loans are typically used for medium-term and long-term financing, usually over three years. The amount you pay remains the same for the loan term, but the amount applied to both the principal and interest changes with each payment.nnInterest gets paid first, with the remaining amount of the payment applied to the principal. The first payment will have the highest percentage applied to the interest and the lowest percentage applied to the principal amount.nnWith each subsequent payment, the remaining balance decreases. As a result, the percentage of payment that goes to the interest decreases as the percentage applied to the principal increases.