repayment systems

Repayment systems refer to the methods and schedules by which borrowers return borrowed money, typically with interest. Common systems include installment payments, where the borrower pays a fixed amount regularly until the debt is cleared, or interest-only payments, where only interest is paid periodically with the principal paid later. Some loans have a lump sum repayment at the end. The system chosen affects monthly cash flow and total interest paid. Financial institutions select repayment systems based on loan type, borrower capacity, and agreement terms to ensure both parties manage risk and obligations effectively.