As the loan amortizes and nears the end, the majority of the payment is used to pay the principal is the correct answer.
What is a loan?
A loan is a commitment that you (the borrower) will receive money from a lender, and you will pay back the total borrowed, with added interest, over a defined time period. A loan may be secured by collateral such as a mortgage or it may be unsecured such as a credit card.
For the given situation,
At the beginning of the loan's term, the majority of the payments are given to interest and just a small part to the loan's principal.
Near the end of the loan's term, the majority of each payment given to principal, and only a small portion is allocated to interest.
Hence we can conclude that as the loan amortizes and nears the end, the majority of the payment is used to pay the principal is the correct answer.
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