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1. Dictionary

   balloon payment

   noun

   • 1. a repayment of the outstanding principal sum made at the end of a loan period, interest only having been paid hitherto.

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2. • Final amount due on a loan

     • A balloon payment is the final amount due on a loan that is structured as a series of small monthly payments followed by a single much larger sum at the end of the loan period. The early payments may be all or almost all payments of interest owed on the loan, with the balloon payment being the principal of the loan.
     www.investopedia.com/terms/b/balloon-payment.asp

     Balloon Payment: What It Is, How It Works, Examples, Pros and ...

3. People also ask

   What is a balloon payment?

   • The balloon payment may be a weighted payment amount or, under an interest-only payment plan, be the full balance of the principal due. As the term "balloon" suggests, the final payment on this type of loan is significantly large. In recent years, balloon payments have been more common in commercial lending than in consumer lending.

   Balloon Payment: What It Is, How It Works, Examples, Pros and Cons

   www.investopedia.com/terms/b/balloon-payment.asp

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   What is a balloon payment on a mortgage?

   • A balloon payment is a payoff option on a loan that allows you to make a larger-than-usual lump sum payment at the end of the loan’s term. This, in turn, can lower your earlier payments. A balloon payment structure is sometimes offered on home mortgages, auto loans, and business loans. Is it a good deal for the borrower? Sometimes.

   What Is a Balloon Payment? How Does It Work? - SoFi

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   What is a balloon loan?

   • The interest rate is usually higher for a balloon loan, and only borrowers with high creditworthiness are considered. The balloon payment may be a weighted payment amount or, under an interest-only payment plan, be the full balance of the principal due. As the term "balloon" suggests, the final payment on this type of loan is significantly large.

   Balloon Payment: What It Is, How It Works, Examples, Pros and Cons

   www.investopedia.com/terms/b/balloon-payment.asp

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   What is a balloon payment on a car loan?

   • The balloon payment for an auto loan might be up to half the entire loan amount. Furthermore, the auto lender might charge a higher annual percentage rate (APR) for a balloon loan than it does for a traditional loan. A business loan might also include a balloon payment.

   What Is a Balloon Payment? - Capital One

   www.capitalone.com/learn-grow/money-management/balloon-payment/

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   When is a balloon payment due?

   • A balloon payment is due at the end of a balloon loan’s term. So, if someone takes out a three-year balloon loan, they would make the balloon payment at the end of the three-year period. Once the borrower makes the balloon payment, the loan should be paid off in full.

   What Is a Balloon Payment? - Capital One

   www.capitalone.com/learn-grow/money-management/balloon-payment/

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   How does a balloon payment loan work?

   • A balloon payment loan works just like any other installment loan. The only difference is that the amount of the final payment is usually substantially higher than the previous payments. The balloon payment may simply be a weighted payment amount.

   What Is a Balloon Payment? How Does It Work? - SoFi

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4. www.investopedia.com › terms › bBalloon Payment: What It Is, How It Works, Examples, Pros and ...

   www.investopedia.com › terms › b

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   Jun 29, 2023 · A balloon payment is a lump sum principal balance that is due at the end of a loan term. The borrower pays much smaller monthly payments until the balloon payment is due.

5. www.rate.com › resources › balloon-paymentsWhat is a Balloon Payment? | Balloon Mortgage Payments ...

   www.rate.com › resources › balloon-payments

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   A balloon payment — or balloon note — is a large lump sum payment that borrowers owe before a home loan can fully amortize. Backloading the bulk of the principal comes with a couple of benefits for homeowners — namely reduced interest rates and lower mortgage payments.

   • Author: Jeff Keleher

6. www.sofi.com › learn › contentWhat Is a Balloon Payment? How Does It Work? - SoFi

   www.sofi.com › learn › content

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   Oct 2, 2024 · A balloon payment is a large lump sum payment at the end of a loan term that can lower earlier payments. Learn how balloon payments work, when to use them, and what risks they involve for mortgages, auto loans, and business loans.

7. Videos

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     investopedia.com

     Balloon Payment: What It Is, How It Works, Examples, Pros and Cons

     31 Dec 2008

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     2:43

     youtube.com

     Understanding "Balloon Payment": An Easy Guide

     1 Jan 2024

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     1:38

     youtube.com

     Balloon Payment Explained

     6 Oct 2020

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8. www.carwow.co.uk › what-is-a-balloon-paymentWhat is a balloon payment on a car? - carwow

   www.carwow.co.uk › what-is-a-balloon-payment

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   Jan 12, 2024 · Balloon payments (also known as optional final payments) are calculated by working out the difference between the purchase price less the deposit and total monthly payments you make towards the vehicle and its estimated future value.

9. corporatefinanceinstitute.com › balloon-paymentBalloon Payment - Definition, Formula, Calculate

   corporatefinanceinstitute.com › balloon-payment

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   A balloon payment is a large payment due at the end of a loan term, while a fully amortized loan is paid in equal installments. Learn how to calculate balloon payments and their advantages and disadvantages with examples and graphs.

10. www.capitalone.com › balloon-paymentWhat Is a Balloon Payment? - Capital One

    www.capitalone.com › balloon-payment

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    Jun 19, 2023 · A balloon payment is a one-time, larger-than-usual payment made at the end of a loan term. Learn how balloon payments work, when they are due, and what options are available if you can't afford them.

11. www.investopedia.com › terms › bHow a Balloon Loan Works - Investopedia

    www.investopedia.com › terms › b

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    May 11, 2023 · A balloon loan is a short-term loan that requires a large final payment to repay the remaining balance. Learn how balloon loans work, when they are used, and what risks they involve.