Finance
A 'negative amortization' loan in NC means:
AThe loan balance decreases faster than scheduled
BThe monthly payment is less than the interest due, causing the loan balance to increase✓ Correct
CThe borrower pays principal only for a period
DThe loan carries a negative interest rate
Explanation
Negative amortization occurs when the monthly payment is insufficient to cover the interest accruing, so the unpaid interest is added to the principal — causing the loan balance to grow.
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