Repayment Methods Explained
Equal Installment: Pay the same amount (principal + interest) each month.
Equal Principal: Pay the same principal each month, interest decreases over time.
Bullet Payment: Pay only interest monthly, repay principal at maturity.
GPM (Graduated Payment): Start with lower payments that gradually increase.
Bi-weekly Payment: Pay every 2 weeks, resulting in 26 payments per year.
Accelerated Payment: Add extra amount to base payment for faster repayment.
Seasonal Payment: Make extra payments in specific months.
GEM: Payment amount increases by a fixed percentage annually.
Hybrid: Fixed rate initially, then converts to adjustable rate.
Flexible Payment: Adjust payment within min-max range.
Interest-Only Period: Pay only interest initially, then switch to principal + interest. Reduces early cash flow burden.
Balloon with Partial Principal: Make small monthly payments, then large lump-sum at maturity. Reduces monthly burden while paying down some principal.
ARM with Caps: Adjustable rate with annual/lifetime caps to limit rate increase risk. Safe variable rate loan.