Balloon Loan

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Related to Balloon Notes: Balloon Loans

Balloon Loan

A loan or bond in which the borrower makes only interest payments for a set period of time. At the end of the term, the borrower repays the entire principal at once. A balloon loan may be useful when the borrower expects interest rates to be low at the end of the term, allowing him/her simply to refinance the loan. However, there is a high risk of default because not all borrowers actually have the cash to repay an entire loan in one payment. See also: Balloon Mortgage.
References in periodicals archive ?
For example, a seller age 60, who sells an asset in August 2003, for $1,000,000 with a 20-year balloon note structured as a SCIN, must use a rate of 5.
Founded in 1984 and headquartered in Denver, The Aimbridge Group markets financial products, such as auto loans, leases balloon notes and insurance products through partnerships with credit unions.
But sometimes balloon payments can ruin borrowers who do not have a rising stream of income and who are unduly influenced by the lower short-term cost of a balloon note.
Balloon notes are a hybrid of a traditional loan and a lease.
The company offers the balloon notes to credit unions through a direct or an indirect method.
Balloon notes can be obtained through an Internet solution on The Aimbridge Group's Web site.
Balloon notes also present members with another financing alternative for a car so they don't have to have a fully amortizing loan, offering them a lower payment.
The Aimbridge Group, a provider of financial products through partnerships with credit unions, announced that it offers balloon note financing on automobiles to credit union members.
DRAFT-PAK Mechanical also includes automatic feature labeling for industry standard or customized manufacturing labels, balloon notes that incorporate automatic stacking/numbering, automatic tabular dimensioning and hole labeling, and a MicroStation Cell Library of over 500 symbols for fluid power, piping, electrical, sheet metal, and logic.
There was no specific language that identified Reverend Hargraves' loan as a balloon note.