A non-blended loan is a type of loan that has a fixed monthly principal payment plus interest on the declining balance. The total payment of principal and interest is not blended into single unchanging amount. It sees declining monthly payments over the life of a loan.
For example, a business takes a $120,000 non-blended loan with equal monthly principal payments of $2,000. In month one, it pays $2,000 in principal plus $900 in interest for a total payment of $2,900. By month 48, interest has declined to $200 because the balance is much lower — resulting in decreasing payments over time.
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