Market Trader Glossary Negative amortization loan outstanding

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Market Trader Glossary: Negative amortization

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Term:

Negative amortization

Definition:

A Loan repayment schedule in which the outstanding Principal balance of the loan increases, rather than amortizing, because the scheduled monthly payments do not Cover the Full amount required to amortize the loan. The unpaid Interest is added to the Outstanding principal, to be repaid later.

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02/09/2012 - SV1n