Negative amortization is an increase in the outstanding balance of a loan resulting from the failure of periodic debt service payments to cover the required interest charged on the loan.
The payoff amount refers to the remaining balance of a loan that a borrower must pay to completely satisfy the debt, including any applicable prepayment penalty.
Discover comprehensive accounting definitions and practical insights. Empowering students and professionals with clear and concise explanations for a better understanding of financial terms.