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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.


The loan balance remaining at the time the loan contract calls for full repayment.

References in periodicals archive ?
The pack features a 35cl bottle of Courvoisier VS Cognac with a brandy balloon glass and will be available in Sainsbury's, Asda and Makro for 9.
Thanks to the fine brandy base it is much heavier than Cointreau, and should be served in a balloon glass at room temperature.
A fuller-length shot would reveal me in smoking jacket clutching a balloon glass of the finest Cognac in one hand and a thick Havana cigar in the other.