Balloon Loan

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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 ?
Amortization and Maturity Schedule: Five (91%) of the seven loans are fully amortizing; the remaining two are balloon loans.
The majority of commercial and apartment building loans today are balloon loans.
Asset managers reported 10 new delinquent assets in October: three term defaults; two matured balloon loans, three new credit-impaired securities and two repurchased assets.
While most creditors believe low monthly payments and a balloon payment can be a useful tool in some cases and should be permitted, the current less-than-five-year rule can still be criticized because it allows creditors to flip mortgages with balloon loans that mature in five years.
DrivingSense[TM] makes it easy for credit unions to offer branded balloon loans to members.
6%) are amortizing balloon loans with a term of 10 years.
The delinquency index reflects delinquent loans for 60 days or longer, matured balloon loans and the current month's repurchased assets.
During nonconventional times, such as what we are currently experiencing, nonconventional auto financing, balloon loans and leasing can provide unprecedented opportunity along with reduced risk.
New delinquent assets in October consisted of five matured balloon loans, four credit impaired securities, and two term defaults.
This includes defeased loans, fully amortizing loans, balloon loans, and Fitch loans of concern.
Typically, Aspire's taxicab medallion loans are three-year or five-year balloon loans.
Although commonly used for second and commercial mortgages, balloon loans have only recently made their debut as a financing tool for first mortgages.