In which loan type does the entire principal amount become due with the final interest payment?

The correct choice is a straight term loan because, in this type of loan, the borrower pays only interest throughout the life of the loan and repays the entire principal amount in one lump sum at the end of the term. This structure means that during the loan term, the borrower is not reducing the outstanding principal; therefore, it is only the interest that is being serviced until the final payment.

In contrast, a fixed-rate loan typically involves both principal and interest payments made in regular installments throughout the loan term, effectively amortizing the loan. An amortized loan follows a similar principle where each payment made includes both principal and interest, leading to gradual repayment of the loan over time.

Commercial loans can vary in their structure but are often amortized or fixed-rate rather than solely being a straight term type that would require the principal balance to be paid off entirely at one time. This makes a straight term loan distinct in its repayment method, clarifying why it is the right answer.