5
votes
Why aren’t amortized loans outlawed and replaced with a more equitable model to the borrower?
If you restrict how much profit the bank can make from lending, you'll get less lending. And that will prevent a lot of people from getting loans at all.
If we're talking about a $500k loan, that's ...
- 25.7k
3
votes
Why aren’t amortized loans outlawed and replaced with a more equitable model to the borrower?
Amortizing loans match how banks receive money and how they pay it out.
When you have a savings account with the bank, it earns a certain interest rate monthly, say 0.5% monthly for a 6% annual rate. ...
- 129k
2
votes
Why aren’t amortized loans outlawed and replaced with a more equitable model to the borrower?
I think you have amortising and compounding confused. Amortisation means that the total amount still owing falls with each payment - you could have an amortising loan with 0% interest.
Taking your ...
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