Self-amortizing loan

Self-Amortizing Loan

A loan where the borrower pays for part of the principal and the interest each month. A self-amortizing loan differs from an interest-only mortgage, where the borrower does not make principal payments over the life of the mortgage. An advantage of a self-amortizing loan is the fact that the borrower does not have to make a lump sum payment of the principal at maturity (or refinance at a potentially higher interest rate). However, self-amortizing loans have higher monthly payments than other types of loans. See also: Self-amortizing mortgage.

Self-amortizing loan.

A self-amortizing loan is one that's paid off over a specific period of time as the borrower makes regular installment payments.

Part of each payment covers some interest on the loan, and the rest is applied to the principal. When the last payment is made, both principal and interest have been paid in full.

Self-amortizing loans can be bundled together and offered for sale as debt securities, such as those available through Ginnie Mae (GNMA). If you buy GNMA or similar bonds, you get back part of your principal as well as the interest you've earned each time you receive an interest payment. There is no lump-sum repayment of principal when the bond matures.

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The IRS indicated that, as a matter of "administrative convenience" it would allow the rule of 78's for certain short-term consumer loans only when there was a self-amortizing loan that required level payments (at regular intervals at least annually) over a period not in excess of five years (with no balloon payment at the end of the loan term) and when the loan agreement between the borrower and the lender provided that interest was earned (or when the prepayment of the loan interest was treated as earned) in accordance with the rule of 78's method.
Additional funding was provided by Getty to CPD under a secured, self-amortizing loan having a 10-year term.
The transaction is a 30-year self-amortizing loan with a ground lease.
Deerwood founding partner Abe Katz negotiated a fixed rate on a 20-year, self-amortizing loan, through a local New Jersey bank.
The permanent, nonrecourse, self-amortizing loan was funded by CTL Capital and featured a competitive 5.
This loan is a self-amortizing loan over a 15-year period.
The self-amortizing loan met the requirements of the board of directors, who sought to take advantage of the current low interest rate environment to put in place a long-term, self-liquidating mortgage.
The mortgagor receives a 35 year self-amortizing loan (40 years on new construction) of up to 85 percent loan to value at a fixed rate of interest (currently at 7.
10-year term with a 30-year amortization); however, in some cases, self-amortizing loans can be structured.