periodic payment plan to pay a debt in which the interest and a portion of the principal are included in each payment by an established mathematical formula; by figuring the interest on the declining principal and the number of years of the loan, the monthly payments are averaged and determined; since the main portion of the early payments is interest, the principal does not decline rapidly until the latter stages of the loan term; if the amortization leaves a principal balance at the close of the time for repayment, this final lump sum is called a "balloon" payment