Balloon Loan

(redirected from Balloon note)
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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.
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Alternatively, it may be possible for the terms of the promissory note to be renegotiated into a new balloon note.
Estate planning during turbulent times
Balloon notes that provide only for the payment of interest will enhance borrower's liquidity.
Tax-efficient wealth transfers: low interest rates offer opportunities for small businesses
The IDIT has to pay only interest on the balloon note until maturity.
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is providing a 10-year balloon note that replaces $3.
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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.
Statements to the Congress
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.
Significant recent developments in estate planning

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