What exactly is an Evergreen Loan?

An evergreen loan is that loan that will not need the payment of principal through the lifetime of the mortgage, or throughout a certain period of the time. The borrower is required to make only interest payments during the life of the loan in an evergreen loan. Evergreen loans are often by means of a relative credit line that is constantly paid off, leaving the debtor with available funds for credit acquisitions. Evergreen loans can also be referred to as “standing” or “revolving” loans.

Key Takeaways

• An evergreen loan is really a sort of interest-only loan for which major repayment is deferred.
• Typically, the payment of principal is just expected during the end associated with the loan term, although rates of interest might be greater or include charges for delayed repayment. Continue reading →