A loan with a series of regularly scheduled payments that include both interest and partial repayment of principal.
Equal payments1 – Payments are of equal size with declining interest and increasing principal.
Equal principal payments – Equal principal payments with declining interest payments. Interest decreases because the unpaid balance decreases. Because interest payments decrease, total payments decrease.
Reverse amortization – The annual payment is less than the interest obligation during the early years of the debt obligation so that the outstanding balance on the debt actually increases rather than decreases