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Reference.org
PIK loan
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<p>A PIK, or payment in kind, is a type of high-risk <a href="/facts/Loan/bPaAc9HT">loan</a> or <a href="/facts/Bond_(finance)/qlmpLj0k">bond</a> that allows borrowers to pay <a href="/facts/Interest_(finance)/qfNEuKg0">interest</a> with additional debt, rather than cash. That makes it an expensive, high-risk financing instrument since the size of the debt may increase quickly, leaving lenders with big losses if the borrower is unable to pay back the loan. </p>