this post was submitted on 14 Jan 2024
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Wouldn't they need to pay the full loan by maturity date? Or are they getting loans with no maturity date?
No, they pay the loan balance throughout the term of the loan. For example, for my mortgage, my final payment is the same as every other payment, it's just the point as which my debt reaches $0.
However, they're probably getting margin loans, which have no maturity date. With a margin loan, you just pay interest in the loan, with nothing going to principle, so they'd just keep that same loan until they die (rates change with the market).
It's probably a mix of both.