What Is a Balloon Payment?
Loans can be repaid in a number of different ways. The creditor might be expected to pay back the money in regular equal amounts over a certain amount of time until the debt is repaid. This is not the only way of doing things though. A balloon payment refers to a large lump sum that will be due at certain times during the repayment period. In a lot of instances this large payment will be made at the end of the loan.
