Loans in which there is no fixed number of payments and the interest is calculated on the unpaid balance at the end of each payment period are referred to as:

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Open-end loans are lines of credit in which there is no fixed number of payments and interest is calculated on the remaining balance after each payment is made. A credit card is an example of an open-end loan. Closed-end loans (A) have a fixed number of payments and are typically used for a specific purpose, such as a car loan or mortgage. Average daily balance loans (B) typically refer to credit cards that calculate interest based on the balance at the end of each day. Basic installment loans (C) also have a fixed number of payments but are typically used for smaller amounts, such as personal loans.

Loans in Which There Is No Fixed Number of Payments