If you owe the lending institution more at the end of the year than you did at the beginning of the year,you have negative amortization.

Question

Quizplus · Accepted Answer

Negative amortization occurs when your loan payments are not enough to cover the interest due on your loan, resulting in the unpaid interest being added to the loan balance. This means that you owe more at the end of the year than you did at the beginning, making option A true.

If You Owe the Lending Institution More at the End