Balloon Loan

(redirected from Balloon note)
Also found in: Dictionary, Wikipedia.
Related to Balloon note: balloon mortgage, balloon payment, balloon loan

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 ?
Alternatively, it may be possible for the terms of the promissory note to be renegotiated into a new balloon note.
Balloon notes that provide only for the payment of interest will enhance borrower's liquidity.
The IDIT has to pay only interest on the balloon note until maturity.
is providing a 10-year balloon note that replaces $3.
AFG's balloon note financing program, called Driving Sense[TM], is an alternative vehicle financing option that combines the best features of a traditional loan with those of a traditional lease.
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.
Auto Financial Group (AFG) announced today that it has been selected as NAFCU Services Corporation's (NSC) "Preferred Partner" for auto balloon note financing for credit unions.
The sellers financed the remaining $965,000 with a one year balloon note at a fixed rate of 5%.
The redemption was mandatory, but the company had the option of a lump-sum payment or a cash down payment accompanied by a five-year balloon note at 10% interest.
RSA maximizes sales price while mitigating sales expense and risk on repossessed, balloon note, off-lease and otherwise used motor vehicles.
The systems include management-defined queuing capabilities and enable universal memos (memos are stored in one location and are available to all systems) for retail, lease and balloon note accounts.
Part of the browser-based VehicleLinQ suite of products from LeMans, the CPS system equips Porsche Financial Services with an easy-to-use, online application entry system for retail, lease and balloon note processing.