Finance
Negative amortization on a Utah loan occurs when:
AThe borrower pays extra principal each month
BPayments are insufficient to cover interest, causing the loan balance to grow✓ Correct
CThe interest rate decreases over time
DThe lender reduces the loan balance after refinancing
Explanation
Negative amortization occurs when monthly payments are less than the interest accruing on the loan, causing the unpaid interest to be added to the principal balance.
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