An interest-only loan is a loan in which, for a set term, the borrower pays only the interest on the principal balance, with the principal balance unchanged. At the end of the interest-only term the borrower may enter an interest-only mortgage, pay the principal, or (with some lenders) convert the loan to a principal and interest payment (or amortized) loan at his/her option.
Read more about Interest-only Loan: US Interest-only Mortgages, UK Interest-only Mortgages, Canada Rarely Allows Interest-only Loans, Interest-only Loans in India, From An Investor's Perspective
Famous quotes containing the word loan:
“Slight was the thing I bought,
Small was the debt I thought,
Poor was the loan at best—
God! but the interest!”
—Paul Laurence Dunbar (1872–1906)