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» Principal and Interest Loan
- A home or investment loan where the interest (along with a portion of the principal) is paid by the borrower each month.
- This type of loan "amortises" over a term of usually 15, 20, 25 or 30 years.
- P & I loans usually attract a variable interest rate, although they can be set up under a fixed rate which transfers to a variable rate (or another fixed rate) after a period of time.
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