Repayment – The purchase price of real estate is often financed by a loan, whereby the repayment leads to a loan being repaid. Here, the borrower repays the loan monthly on an ongoing basis, whereby the monthly instalments remain the same but the total liabilities decrease due to the ongoing repayment and the burden of the interest portion is correspondingly lower.
Repayment at a glance: The repayment of a loan
- Purchase price of real estate is often financed by a loan
- Repayment leads to a loan being repaid
- In the case of repayment, the borrower repays his loan monthly on an ongoing basis
- The installments remain the same each month, but the total liability decreases and the interest portion decreases due to the ongoing amortization
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