Define: Negative Amortization

Business, Legal & Accounting Glossary

Definition: Negative Amortization


Quick Summary of Negative Amortization


A circumstance that occurs when a loan payment is less than the principal and interest due on a loan.



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Examples of Negative Amortization in a sentence


Any unpaid principle each month makes the accumulated interest amount bigger, which will eventually result in negative amortization.
Even though the company had a full year of negative amortization on their loans, the bank let them extend their payment deadline.



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Negative Amortization. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/negative-amortization/ (accessed: April 05, 2020).
American Psychological Association (APA):
Negative Amortization. PayrollHeaven.com. Retrieved April 05, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/negative-amortization/

Definition Sources


Definitions for Negative Amortization are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 15th February, 2020