Annuity Loan

An annuity loan is a type of amortizing loan. Unlike an installment loan, the principal of an annuity loan is amortized by a series of identical installments (annuities). The combined loan principal and interest charges are divided by the number of amortization payments to be made. Typically, the effective annual interest rate is used when calculating repayments.

In Switzerland, annuity loans are the legal standard for personal loans, as per Swiss consumer credit laws. Some business loan providers also offer annuity loans which must be amortized throughout the loan term.

More on this topic:
Annuity loan comparison
Business annuity loan comparison