Balloon Payment
A balloon payment is a large lump-sum payment due at the end of a loan term. It is used when earlier payments are set lower than a fully amortized schedule.
Borrowers often plan to refinance or sell the asset before the balloon payment comes due. If they cannot, the loan may default.
Related Terms
Mortgage
A mortgage is a loan used to purchase real estate, where the property serves as collateral. The borr...
Principal
Principal is the original amount of money borrowed in a loan or the original amount invested. It doe...
Interest
Interest is the cost of borrowing money or the return earned on deposited funds, typically expressed...
Amortization
Amortization is the process of paying off debt through regular payments over time. Each payment cove...
Need to convert bank statements to spreadsheet format? Try our bank pdf to excel converter to easily export your transaction data to Excel or CSV.
The best offline currency converter.
Built for travelers.