What are interest-only loans? How are they structured and who are they right for? How do you avoid common mistakes people make when choosing interest-only loans?
Loans with the option of paying only the interest every month are called interest-only loans. These loans allow you to pay on the principal balance only when you want to or when it is convenient for you.
Most interest-only (IO) loans carry this option to pay the interest only for a limited amount of time, usually from 5 to 10 years. The remaining principal balance comes due at the end of the term.
IO loans can be a good choice for borrowers whose incomes tend to fluctuate from month to month.
However, this aspect of IO loans can be a pitfall for borrowers who are not disciplined enough to pay View the rest of this article
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