skip to content »

week-tour.ru

Liquidating loan definition

During the busy season when business is booming the company needs to borrow money to finance short-term assets such as inventory and accounts receivable.

If you borrow $250,000 on a fixed-rate 5 percent interest-only loan, your payments will be $1,041.67 per month until the loan period ends.For example, with a 10-year balloon loan with an amortization schedule, you'll pay about 19 percent of the loan's balance, even though 10 years is 33 percent of the life of a 30-year loan.When you refinance the balloon, you'll have to start again..boxy-content a.term-action, button.term-action a.term-action:hover, button.term-action:hover .term-action-bg .term-uex .term-cite .term-fc .term-edit .boxy-dflt-hder .definition .definition a .definition h2 .example, .highlight-term a.round-btn, a.round-btn.selected:hover a.round-btn:hover, a.round-btn.selected .social-icon a.round-btn .social-icon a.round-btn:hover a.round-btn .fa-facebook a.round-btn .fa-twitter a.round-btn .fa-google-plus .rotate a a.up:hover, selected, a.down:hover, selected, .vote-status .adjacent-term .adjacent-term:hover .adjacent-term .past-tod .past-tod:hover .tod-term .tod-date .tip-content .tooltip-inner .term-tool-action-block .term-link-embed-content .term-fc-options .term-fc-options li .term-fc-options li a .checkmark .quiz-option .quiz-option-bullet .finger-button.quiz-option:hover .definition-number .wd-75 .wd-20 .left-block-terms .left-block-terms .left-block-terms li .no-padding .no-padding-left .no-padding-right .boxy-spacing @media (min-width: 768px) @media (max-width: 768px) @media print { a:link:after, a:visited:after nav, .term-action, #wfi-ad-slot-leaderboard, .wfi-slot, #related-articles, .pop-quiz, #right-block, .A loan used to finance the purchase of assets intended to be sold within a short period of time.Mortgages were originally interest-only loans that needed to be refinanced every five or so years.

After the Great Depression, self-liquidating loans became more prevalent due to support from the Federal Housing Administration and the growth of the savings-and-loan industry.

Its popularity waned a bit during the high inflation and interest rates of the early 1980s, but picked back up after interest and inflation rates dropped later in that decade.

As of the fourth quarter of 2012, the 30-year fixed rate mortgage, which is self-liquidating, was the most popular type of mortgage in the United States.

Calling a loan self-liquidating is just a complicated way of saying that it eventually gets paid off. For example, the popular 30-year fixed rate mortgage is a self-liquidating loan.

While a self-liquidating loan might cost a little bit more than a mortgage with a balloon or a loan with interest-only payments, in the long run it's the best choice for most situations.

Click on the thesaurus category heading under the button in an entry to see the synonyms and related words for that Blog A must for anyone with an interest in the changing face of language.