Information > Financial Terms > This page Amortization Loans Under
the Federal Farm Loan Act, farmers, as members of local cooperative associations
now known as Federal Land Bank associations, may take out loans from the
Federal Land Bank System for as short a period as five years and for as
long a period as 40 years. Payments
are made annually or semiannually so as to liquidate the entire indebtedness
in the period of the loan. The
original Federal Farm Loan Board, since succeeded by the Farm Credit Administration,
encouraged the Federal Land banks in establishing a standard 33-year loan.
It did this because this sort of loan was one which simplified
the bookkeeping, made the matter of payments and amortization plain to
everybody, and gave every borrower the chance to turn himself so far as
time was concerned. It spread
the privilege of payment over a generation in time, and met every want
of almost every borrower. |