Straight Note in Real Estate Example

Borrower Lee promises to pay monthly interest on a loan and will pay the entire principal amount on the last payment.  Lee most likely signed which type of note:

  1.  installment note
  2.  negatively amortized note
  3.  straight note
  4.  adjustable rate note

The answer is C.  A straight note is also known as an “interest only” note, wherein the borrower pays only the interest on the note every month but then pays off the entire principal on the very last payment.