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 ?
The remaining cost is spread over the term of the contract, or you can pay lower monthly rentals and a final balloon payment at the end of the term.
In response to feedback stating appraisals should be required only when there is unequal or graduating amortization, the FSA disagreed, stating that "an appraisal will always be necessary when restructuring with a balloon payment in order to provide some assurance that there is adequate security for the debt."
Although the balloon payment in this transaction comes after five years, an even later balloon payment could work.
The other important consideration is to structure in a realistic balloon payment. There may be short-term gain in going for a lower monthly installment by requiring a larger balloon payment at the end of the five-year period, but that can be very damaging to a brand and leave a sour taste in the consumer s mouth.
Taking an Alto at pounds 6,665 as an example, a deposit of pounds 465 is required to drive away followed by 36 monthly payments of pounds 150 and an optional balloon payment of pounds 2,380 to keep the car at the end of the term.
balloon payment. Monthly payments would be $325.58 with a 3-yr.
At the end of the loan term, he would have a balloon payment.
The latter can be accomplished either by making larger payments after the employee returns to work, or the employee can continue to pay the same amount as prior to the leave, then make a balloon payment at the end.
"Luckily, the mortgage banker arranged a loan that paid off the balloon payment and refinanced what was still owed on the house." With balloon financing, a huge payment is due when the loan term ends.
This scheme assists customers preferring a small deposit, with 36 monthly payments from just pounds 149 for Swift SZ2 and a final balloon payment to keep the car at the end of the agreement.
At the end of the loan term, he would have a balloon payment. In today's environment these parameters have gone with the wind.
The IRS indicated that, as a matter of "administrative convenience" it would allow the rule of 78's for certain short-term consumer loans only when there was a self-amortizing loan that required level payments (at regular intervals at least annually) over a period not in excess of five years (with no balloon payment at the end of the loan term) and when the loan agreement between the borrower and the lender provided that interest was earned (or when the prepayment of the loan interest was treated as earned) in accordance with the rule of 78's method.