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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
Regulators in Australia are tightening norms for interest-only loan providers in order to normalise the skewed residential property lending business.
Ready Capital Structured Finance closed the $14.0 million non-recourse floating rate interest-only loan that features a 36-month term with two extension options, flexible pre-payment, and is inclusive of a facility to provide for capital expenditures, working capital, and interest and carry reserves.
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 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. Interest-only loans allow buyers to lower their mortgage payments by paying the interest on the loan for a period of three, five, seven, or 10 years.
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.
The interest-only loan is for a 3-year term and was closed within two weeks of application.
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.
The financing was structured to be a 7-year interest-only loan and was funded to 59% of value.
Spinner and David Zlotnick of Meridian's New York office secured a 12-month, interest-only loan floating at Prime + 6%.