What is a typical characteristic of a conventional loan?

A conventional loan is characterized by its structured repayment schedule, which is typically amortized over a specific time period. This means that the loan is repaid through regular payments that cover both principal and interest, calculated to ensure that the loan is fully paid off by the end of its term, which may be 15, 20, or 30 years, for example. This predictable structure benefits borrowers, as they know exactly how much they will pay each month and can plan accordingly.

In contrast, an interest-only loan would not require principal payments for a set period, making option B inaccurate for conventional loans. A variable interest rate is characteristic of certain loan types, such as adjustable-rate mortgages, not necessarily conventional loans, which often feature fixed interest rates. Lastly, the idea of a non-repayable loan suggests that no payments are made toward reducing the principal, which is not true of conventional loans; they are indeed repayable through regular payments. Thus, the key feature of amortization over a specific time frame underlines the stability and predictability offered by conventional loans.