Understanding Unamortization: What It Is and Why It Matters

Unamortization refers to the portion of a loan or debt that has not been repaid or amortized over time. It represents the remaining balance of the loan that still needs to be paid off, and it is typically expressed as a percentage of the original loan amount.

For example, if you have a $100,000 mortgage with a 30-year term, and you have made payments totaling $50,000 over the first five years, then the unamortization of the loan would be $50,000 ($100,000 - $50,000). This means that there is still $50,000 left to be repaid on the loan.

Unamortization can be important when evaluating a company's financial health, as it can indicate how much debt the company has outstanding and how quickly it is being paid off. A high level of unamortization may indicate that a company is struggling to pay off its debts or that it has taken on too much debt relative to its earnings.