Loan Maturity is the end of the life of your loan. The short answer to the above question is "maybe. With all loans, the payments are typically broken down into 2 pieces. A portion will go towards interest, and a portion towards the principal. Depending on how the loan is written, if the loan is not fully amortized, then there will be a balance at the end of the life of the loan that must be paid off in a single payment. On the other hand, if the loan is fully amortized at loan maturity, then there will be no large balance left to pay.
What Does Loan Maturity Mean? - santuariodellaverna.com
The maturity date is the date on which the principal amount of a note, draft, acceptance bond or other debt instrument becomes due. On this date, which is generally printed on the certificate of the instrument in question, the principal investment is repaid to the investor, while the interest payments that were regularly paid out during the life of the bond, cease to roll in. The maturity date also refers to the termination date due date on which an installment loan must be paid back in full. The maturity date defines the lifespan of a security, informing investors when they will receive their principal back. The date also delineates the period of time in which investors will receive interest payments. However, it is important to note that some debt instruments, such as fixed-income securities , may be "callable," in which case the issuer of the debt maintains the right to pay back the principal at any time. Thus, investors should inquire, before buying any fixed-income securities, as to whether the bonds are callable or not.
In finance, maturity or maturity date refers to the final payment date of a loan or other financial instrument , at which point the principal and all remaining interest is due to be paid. The term fixed maturity is applicable to any form of financial instrument under which the loan is due to be repaid on a fixed date. This includes fixed interest and variable rate loans or debt instruments, whatever they are called, and other forms of security such as redeemable preference shares, provided their terms of issue specify a date. It is similar in meaning to "redemption date". However some such instruments may have no fixed maturity date.
Why Zacks? Learn to Be a Better Investor. Forgot Password. If you've borrowed money from a bank or other company to buy a house, then you've taken out a mortgage. A mortgage is a loan secured by property: the house which you've purchased and now own.