In real estate finance, an Interest-Included Note is a promissory note that requires equal periodic payments, usually made monthly. Each payment includes both principal and interest, with interest calculated on the declining principal balance.
As the principal balance is reduced over time, the amount of interest charged decreases, allowing a greater portion of each payment to be applied to principal. This structure results in a fully amortized loan, where the loan balance is gradually paid off through consistent payments over the loan term.
