The German system is a repayment or amortization system in which loan installments vary over the entire term of the loan.
Under the German system, the proportion of principal in the installment is always the same and the interest payable is calculated on the basis of this proportion. This interest decreases over time in line with the amount of principal owed.
As a consequence, this amortization system results in decreasing installments, which is not the case with the French system, based on fixed installments.