Sophisticated borrowers will carefully manage the level of negative amortization that they allow to accrue.
That, however, typically results in negative amortization, which means that any interest not covered by the monthly payment is added to the outstanding balance.
This type of loan can result in negative amortization.
In addition, there are loans that allow negative amortization, which means the payments do not meet the interest due on loan.
This created negative amortization, which the credit consumer might not notice until long after the loan transaction had been consummated.
This situation is referred to as negative amortization.
Over time, that process - called negative amortization - will increase your outstanding loan balance, especially if interest rates rise.
Such loans at times result in a rising loan balance, or negative amortization.
Start rates on negative amortization or minimum payment option loans can be as low as 1%.
This early stage is known as the negative amortization or NegAm period.