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Indexed Loan
(redirected from Indexed Loans)

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Indexed Loan
A loan with a payment that changes periodically. For example, the payment may increase if the Consumer Price Index rises to a certain level. Likewise, it may fall if the CPI drops. An indexed loan protects against risks such as inflation risk that would reduce the yield for the lender. Indexed loans are most commonly long-term loans as the changing payment reduces the uncertainty attached to any long term investment. See also: Variable-rate loan.
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