End Loan

DEFINITION of 'End Loan'

A permanent, long-term loan used to pay off a short-term construction loan or other form of interim financing. Although an end loan can have interest-only or other features that delay the repayment of principal, at some point, an end loan begins to amortize. This differs from construction loans or other forms of interim financing, which are typically interest-only loans that require full repayment of principal and accrued interest only upon disbursement of funds from the end loan.

BREAKING DOWN 'End Loan'

An end loan might be part of a combination or construction/end loan, which allows a borrower to deal with only one lender, file only one credit application and generally pay only one set of loan settlement costs. However, there are also disadvantages to dealing with only one lender in a combination or construction/end loan, such as being unable to shop around for the best deal after the interim construction financing. A borrower should carefully weigh the benefits of a combination/end loan against the risks.

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