Add-on basis installment loan
Add-on basis installment loan is a loan which interest is calculated over the life of the loan and then added on to the loan amount. This total amount is paid in equal installments. This raises the effective cost of the loan.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Add-on basis installment loan. Interest is calculated over the life of the loan and then added on to the loan amount. This total amount is paid in equal installments. This raises the effective cost of the loan.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
