interest-only loan

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Interest-only loan

A loan in which payment of principal is deferred and interest payments are the only current obligation.

Interest-Only Loan

A non-amortized loan. During the payment period of interest-only loans, one only pays on the interest that accumulates but not on the principal. At the end of the loan's term, the entire principal is due. An example is an interest-only mortgage, in which one makes interest payments for the term of the mortgage and then refinances in order to pay the principal at maturity.

interest-only loan

A loan on which one pays periodic interest payments without any reduction in principal,and the entire principal balance is due and payable upon maturity of the note.

References in periodicals archive ?
The seven-year, interest-only loan was originated by Prudential, and carries a 7.
Since the interest-only loan includes the option of paying lump sums of principal at the owner's discretion, it is popular among those with fluctuating incomes and those receiving bulk bonus payments.
Like most banks that intend to continue to offer interest-only loans, the bank has reviewed its underwriting requirements to qualify for an interest-only loan to ensure the borrower has the ability to repay the loan once the interest-only period has expired.
WHEN the pressures begin to build on balancing the household budget, does it make sense to use the mortgage as a safety valve by switching to an interest-only loan to cut monthly repayments?
The financing was structured to be a 7-year interest-only loan and was funded to 59% of value.
The self-employed, contract workers and those receiving substantial bonuses can choose to minimise their regular monthly payments with an interest-only loan and use 'peaks' of higher income to make ad hoc capital repayments.
When Lawrence Ragland was looking to expand his real estate holdings, he used funds he obtained from a cash-out option on a five-year interest-only loan.
But the interest-only loan, which stretches 35 years, fit her family's situation.
He said some borrowers were relying on interest rates peaking next year and then falling, and planned to have an interest-only loan for just two years before switching to a repayment one, while others were hoping their financial position would be better in two years' time.
Other popular loans included the interest-only loan (25 percent), prime adjustable loan (23 percent), the hybrid adjustable (15 percent), and the non prime loan (8 percent).
Spinner and David Zlotnick of Meridian's New York office secured a 12-month, interest-only loan floating at Prime + 6%.
This can happen if the lender or intermediary wrongly sets up the loan as interest-only when it should have been a repayment loan or if the investment planned to repay the interest-only loan is not set up.