Which of the following is also referred to as a negative amortization loan?
A)Participation loan
B)Accrual loan
C)Convertible loan
D)Interest only loan

Question

Quizplus · Accepted Answer

A negative amortization loan is one where the payments made by the borrower are less than the interest charge on the loan. This causes the loan balance to increase rather than decrease over time. "Accrual loan" is another term used for this type of loan, as the interest that isn't covered by the payments accrues and is added to the principal balance.

Which of the Following Is Also Referred to as a Negative