Negative amortization limit
Negative amortization limit
Negative amortization limit is a cap on the amount of accrued interest that can be added to the principal balance of a loan that allows negative amortization. Negative amortization occurs when a loan's minimum payments are less than that period's accrued interest. The shortfall is added into the loan balance at the end of each period. The limit is usually defined as a percentage of the opening loan balance.
6.05
