Question 4. Do You Know What Is Negative Amortization?
Answer : When repayment of the loan is less than the loans accumulated interest, then negative Amortization occurs. It will increase the loan amount instead of decreasing it. It is also known as ‘deferred interest'.
Negative amortization means that even when you pay, the amount you owe will still go up because you are not paying enough to cover the interest. Your lender may offer you the choice to make a minimum payment that doesn't cover the interest you
