Balloon Loan

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Related to Bullet Note: Bullet point, Bullet Bond, Bullet 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 ?
5% step-up due in 2012, and USD204 million bullet notes at 7.
5% step-up due in 2012 and USD204 million bullet notes at 7.
5% step-up due in 2012 and US$204 million bullet notes at 7.