What type of loan requires principal and interest payments at regular intervals until the debt is liquidated?

An amortized loan is characterized by a repayment structure that includes regular payments of both principal and interest over the life of the loan. This systematic approach gradually reduces the outstanding principal balance until the loan is fully paid off by the end of the term. Each payment contributes to both the interest expense and the principal reduction, ensuring that the borrower is making consistent progress toward paying off the entire debt.

In contrast, an interest-only loan involves payments that cover only the interest for a certain period, leaving the principal amount unchanged until a later date. A variable-rate loan may have fluctuating interest rates but does not specifically describe a payment structure, while a balloon loan typically requires smaller payments over the term, with a large final payment (the "balloon") at the end to cover the remaining balance. The defining feature of an amortized loan is its predictable payment schedule that culminates in full debt liquidation at the end of the term, making it the correct answer in this context.