A long-term loan, often a mortgage, that has one large payment (the balloon payment) due upon maturity. A balloon loan will often have the advantage of very low interest payments, thus requiring very little capital outlay during the life of the loan. Since most of the repayment is deferred until the end of the payment period, the borrower has substantial flexibility to utilize the available capital during the life of the loan. The major problem with such a loan is that the borrower needs to be self-disciplined in preparing for the large single payment, since interim payments are not being made. Balloon loans are often undertaken when refinancing or when a major cash flow event is anticipated. also called balloon note or bullet loan.
Related information about balloon loan:
- Balloon Loan Definition | Investopedia
A type of loan which does not fully amortize over its term. Since it is not fully amortized, a balloon payment is required at the end of the term to repay the ...
- Balloon payment mortgage - Wikipedia, the free encyclopedia
The most common way of describing a balloon loan uses the terminology X due in Y, where X is the number of years over which the loan is amortized, and Y is ...
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Definition of balloon loan: A long-term loan, often a mortgage, that has one large payment (the balloon payment) due upon maturity. A balloon loan will often ...
- Is a Balloon Loan Better Than an Adjustable Rate Mortgage? - The ...
May 4, 1998 ... I would select a balloon over an ARM with the same initial rate period only if I were 90% sure that I would be out of the house before the end of ...
- What you should know about balloon loans | Inman News
Jan 16, 2012 ... For example, if a five-year balloon loan for $100000 is at 5 percent for 30 ... The difference is that on the balloon loan, the balance of $91829 ...
- Balloon Loan - Financial Dictionary - The Free Dictionary
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 ...
- Free Online Balloon Payment Calculator
Help with Balloon Loan Calculations. The balloon payment calculator will calculate one of any five possible unknowns. Enter a zero for one of the following: ...
- A Balloon Payment Car Loan Guide - CarsDirect
Jun 19, 2009 ... First you need to understand exactly what a balloon loan is. ... A balloon loan is a good option if you absolutely need to keep your monthly ...