balloon payment


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Balloon Payment

The final (large) payment that repays all the remaining principal and interest of a partially amortized or unamortized loan. See: Bullet.

balloon payment

A final loan payment that is significantly larger than the payments preceding it. For example, a bond issuer may redeem 3% of the original issue each year for 20 years and then retire the remaining 40% in the year of maturity.

balloon payment

The full principal amount due at the end of a balloon mortgage.

References in periodicals archive ?
By guaranteeing the balloon payment, or residual value for $3 million, monthly payments would be reduced to $100,305, yielding a savings of $2,051,520 over the term of the loan.
For example, mortgages with a balloon payment feature often are attractive to borrowers because they allow distressed borrowers or young borrowers who have low cash incomes to buy homes and match payments with their rising income stream.
Unlike the typical five-year commercial mortgage with a balloon payment, the SBA encourages longer term business financing.
These loans are made to appear attractive by monthly payments that are kept low, but they are often accompanied by a large balloon payment that the consumer must then refinance.
Wallace is hoping the lessors negotiate a fair step up agreement and not wait until the end of the lease term and possibly walk away from a balloon payment.
When the "dust settles," these borrowers may find that they have paid a high number of loan origination and broker points (often financed in the borrowed amount) and have agreed to a loan with an interest rate at the highest levels in the market--sometimes with monthly payments that even exceed their monthly income and often with a balloon payment due.
One bank was proposing that a balloon payment would be reduced at the end of the loan.

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