Negative amortization

• A loan repayment schedule in which the outstanding principal balance of the loan increases, rather than amortizing, because the scheduled monthly payments do not cover the full amount required to amortize the loan. The unpaid interest is added to the outstanding principal, to be repaid later.

• Is the increment to principal over time. This feature reflects the inadequacy of the periodic payment to service both principal and interest. It usually is the result of the addition of interest to the outstanding loan balance.

 Embedded terms in definition
 Related Terms
Amortization factor
Earnings before interest, taxes, depreciation, and amortization
Interest impact on instalment to amortize or amortization
Loan amortization
Loan amortization schedule
Negative carry
Negative convexity
Negative covenant
Negative duration
Negative leverage
Negative pledge clause
Negative yield curve
Planned amortization class
Targeted amortization class

<< Nearby futures contract Negative carry >>

Practical Advice for Everyone on How to Save and Manage Money: No matter how old or young you are, there are some basic things you can do to better manage and protect your money. Here are recommendations from FDIC Consumer News. More...

You are what you think. You are what you go for. You are what you do! Bob Richards


Copyright 2009-2018 GVC. All rights reserved.