Financial Glossary: Graduated Payment


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Graduated Payment

Graduated Payment

Repayment terms calling for gradual increases in the payments on a closed-end obligation.

A graduated payment loan usually involves negative Amortization. Amortization is an accounting practice that companies use to write off intangible rights or assets - such as Goodwill or copyrights.

In the financial world, obligation refers to an outstanding Debt that a party must still repay - and if they do not pay, they Default on the Debt. For example, when the U.S. government issues Treasury bonds it has the obligation to pay back the principal to the Debt holders.

Posted by Financial Research Associates, LLC

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