### Question
How does the law define negative amortization?


### Answer
Under *15 U.S.C. § 1639c*, **negative amortization** is defined as:

> payment of periodic payments that will result in an increase in the principal balance under the terms of the legal obligation

#### Citation:
  - *15 U.S.C. § 1639c*
  - Heading: **CHAPTER 41-CONSUMER CREDIT PROTECTION > SUBCHAPTER I-CONSUMER CREDIT COST DISCLOSURE > Part B-Credit Transactions**

