"Negative amortization" refers to a loan repayment schedule where the outstanding principal balance of the loan increases, as a way to limit the amount of monthly payments. The monthly payments do not cover the full amount required to pay the monthly interest on the loan, and the shortfall is added to the outstanding principal. Mortgage loans with negative amortization have the problem of an increasing principal amount of the loan that must be paid off, but with corresponding benefit of more manageable monthly payments.