Vervaltempo

Vervaltempo is a Dutch finance term describing the pace or schedule at which a financial obligation reaches its due dates. It indicates when principal and interest are due and thus governs the pattern of payments over the life of a loan, bond, lease, or other instrument.

It can be fixed, with payments at regular intervals (monthly, quarterly, semi-annual, annual), or variable according to the contract. The tempo is often determined by the amortization method: amortizing loans repay part of principal in each installment, reducing the outstanding balance, while bullet loans and many bonds postpone principal repayment to a single maturity date.

Vervaltempo affects cash flow management, liquidity, and risk. A faster tempo (more principal due earlier) reduces outstanding debt sooner but increases near-term payment obligations; a slower tempo concentrates payments later, increasing reinvestment risk and exposure to interest rate changes. For investors, tempo influences duration, yield, and refinancing risk.

Common examples include a standard mortgage with monthly amortizing payments; a corporate bond with periodic coupon payments and a final principal repayment; a balloon loan with a large payment at maturity; and a structured product with a tiered or stepping tempo.

In accounting and financial reporting, the tempo is part of the cash flow projections and is used to model future obligations.