Occurs when the lender allows a borrower to make monthly payments that are less than the amount needed to cover even the interest charges. Any interest not paid is added to the original loan balance. The balance of the loan can actually increase.
Occurs when the lender allows a borrower to make monthly payments that are less than the amount needed to cover even the interest charges. Any interest not paid is added to the original loan balance. The balance of the loan can actually increase.