What is the difference between loan term and amortization term

Is this a balloon loan? In that case the loan term would represent when the loan is due and payable, the amortization term would represent the amount of time it would take to pay the loan in full based on the mo. pymts. In other words, you could have a loan due in 7 years with the monthly payment amortized over 30 years - so that the remaining balance after 7 years would need to be paid off.

We are not looking at balloon loans. We are considering the underwriting and pricing from insurance business perspect. Now we know what is amortization term and we know loan term cannot be greater than amortization term. But I want to know what exactly is loan term in simple language.

the words are generally used interchangably.

or "interchangeably" whichever one is actually correct.

So...Lets say the Loan term is 5 years and the amortization is 30 yrs on a $3,666,000 loan. The interest rate is 5.25%. When using excel to figure out total interest paid in a certain year or month, or total principal...what would I use as the number of periods..60 or 360?

Please answer as soon as possible.

you already defined it - amortizaton is 30 years...that's what you use to calculate each month's interest portion. loan times rate divided by term equals monthly interest; and of course the principal paid is the amount obtained when subtracting interest portion from full principal & interest payment.

I can not tell if all the questions are from the same person.

One says they are not looking at a balloon mortgage. Then the next one asks the question giving the terms of a balloon mortgage--the term is 5 years and the monthly payment for those five years is based on a 30 year amortiztion, and that leaves a balloon payment after five years.

man...i spelled "amortization" as "amortizaton" - i need to get some more rest it appears.

and john, we never know; sometimes what looks like completely different scenarios are coming from the same computer keyboard. double-minded people, i guess. it's got to be tough to live with.

now i hope i did better this time.

They are definitely coming from the same person. Not sure what the angle is here. I anticipate that one day these people will put some links on their signatures that have nothing to do with mortgages.

and i almost get a kick out of these guys who post generic questions - sometimes 5 or 6 at a clip and then you find they're answering questions in depth elsewhere - often on the same topic they brought up in their query.

then there is the one who posts in one place that he owns a home that's in foreclosure and what to do....and in another place, he's in the process of obtaining a mortgage...and in yet another, he's worried about how to pay the credit cards he has, and how to repair his credit so he might some day buy a house.

and don't we always answer one or two of those questions before we recognize the folly of it all?

or is it just me that does that?

is this a fair Loan for an investor?

amount= $150,000.00 at Rate: 5% , Term: 5 years, Amortization: 10 years.
plus $20,000 bonus after 5 years

This is a loan I'm asking from an investor for a retail business. He is a friend and wants to lend the money but it needs to be somwhat atractive and fair. I have no down payment and no collateral. The investor won't make me offers and asked me to put something together. Does this deal look good for me as the borrower and is it fair for him as the investor?

Need answer ASAP
Thank you all

for an investor to lend you money at 5% on a commercial property is a steal! for you, anyway. 5%??? that's not even what most first mortgage loans are at now.

if your investor is smart, he'll come up with another number that's more reasonable.

Thank you Mr Akerley.
I am an Optician and I have allot valuable experience in the type of Optical store I want to open. I truly believe that I wil be successfull I'm only missing the money to prove it. The investor is a person that I admire for many reasons and have much respect for. Sadly, I don't understand loans and fair practice when it comes to arraigning deals - I have never done it before. I am hoping for all this to become a part of a life time learning experience in business and I must say that I realy appriciate the help and I think that this form is great.

I would like to ask you what would you do if you were my investor and I was a friend (the kind that you have no problem lending money too.)
What would you offer me (to help me out - and make a buck or two?) How would you structure the deal?

Thank you.
I truly look forward to your reply.
Clueless Jo

Btw this business is a retail optical dispensary with an optometrist on site. I will be leasing the commercial space.
Thanks again.
C.J.