interest-only loan
No-principal debt arrangement
An interest-only loan requires payments that cover only the interest charges, not the principal balance.
During the interest-only period, the borrower's debt doesn't shrink—monthly payments are lower, but nothing goes toward what was actually borrowed.
They took out an interest-only loan to keep payments manageable while renovating.
After the interest-only period ends, payments typically jump significantly as principal repayment begins.
- mortgageSecured home loan
- subprime mortgageHousing loan for unqualified borrowers
- balloonInflatable rubber sac
- balloon paymentLarge final loan installment
- principalChief school administrator
amortization · refinance · home equity · equity · lender · borrower · credit score · ARM · adjustable rate · monthly payment · payment · debt · housing · housing bubble · bank · underwater · risk · speculation
- loansloans, lend, borrow, auto loans, bank loans
- mortgagesfixed-rate mortgage, mortgage broker, adjustable-rate mortgage, mortgage payment, mortgage insurance
- housing crisishousing bubble, housing crash, subprime mortgages, foreclosures, subprime loans
- interest ratesprime rate, base rate, discount rate, lending rate, nominal rate
interest-only loanconventional mortgage
Home loan without federal backing
interest, loan, interests, interested, interesting, interestingly, disinterest, disinterested, uninterested