OK, fine, I see your point, and the semantics of this. I should have put quotes, as in "front loading". Again, the point is the majority of the interest is paid early on since the interest payment is compute on the outstanding balance at each payment period. The result is the interest is "front loaded" and not evenly spread across the loan and is not a front-loaded loan.
Quote:
Originally Posted by dewilson58
Bingo!!!!
TV bonds or a mortgage is not interest front end loaded. Interest is based on the monthly outstanding balance and the principal reduction is based on the overall fixed P&I payment.
Front end interest loaded loans are something different.
 |