Resources > Glossary > Interest-Only Loan Option

Glossary of Notary Public, Mortgage, Signing Agent, and Loan Signing Terms.

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Common Terms 1   Common Terms 2

Interest-Only Loan Option

Function: noun

Definition 1:
Loan payments have two components, principal and interest. An interest-only loan has no principal payments required for a specified period of time. The interest only loan option minimizes your monthly payments by eliminating the need to pay down your balance during the interest-only period, giving you greater cash flow control and/or increased purchasing power. A balloon loan / balloon mortgage would be an example of an interest only loan.