What is another term for a fully amortized loan?

A fully amortized loan is often referred to as a self-liquidating loan. This term highlights the structure of the loan, where the borrower makes regular payments that are designed to fully pay off the principal and interest by the end of the loan term. Each payment contributes to both the interest and the principal balance, ensuring that the loan is completely repaid at maturity.

In contrast, adjustable loans have interest rates that can change over time, variable loans also fluctuate based on market conditions, and interest-only loans allow borrowers to only pay either the interest or a portion of the principal for a certain period, which means the loan does not fully amortize until a later point. The term self-liquidating accurately captures the essence of a fully amortized loan's payment structure and its objective of leading to a zero balance at the end of the term.