• Home
  • Economics
    • Scarcity
    • Opportunity Cost
    • Goods and services
    • Market and economic systems
    • Economy
    • Production
    • Factors of production
    • Production function
    • Equilibrium
    • Economies of scale
    • Economies of scope
    • Efficiency
    • Productivity
    • Comparative advantage
  • Microeconomics
    • Utility
    • Supply and demand
    • Elasticity
    • Economic surplus
    • Consumer surplus
    • Producer surplus
    • Market failure
    • Market structure
  • Macroeconomics
    • GDP
    • Economics GDP Formula
    • GNP Formula
    • NDP
    • National income
    • Disposable income
    • Aggregate demand
    • Aggregate supply
    • Unemployment
    • Inflation
    • Interest rate
    • Business cycle
    • Central bank
    • Investment
  • Guest Post
Tuesday, May 20, 2025
  • Login
EconGuru
  • Business
    • All
    • Accounting
    • Entrepreneurship
    • Management
    • Marketing
    • MBA
    Guest Experiences at hotel

    Exceeding Expectations: How Offering Unique Guest Experiences Can Drive Hotel Revenue

    Understanding Performance Reporting for Your Company

    Easy Ways to Ramp Up Security for Your Small Business

    3 Things You Should Know Before You Start a Web Design Firm

    5 Ways to Make Money When You Are Disabled

    5 Business Ideas You Can Run From Anywhere In The World

    5 Best Books to Learn Stocks Trading: Study for Successful Investing

    6 Best Real Estate Books to Get You a Solid Education In Real Estate Investing

    Must-Read 5 Best Business Books For Men And Women Who Love Success!

  • Economics
    • All
    • Basic Economic Concepts
    • Economic Data
    • Economic Mathematics
    • Economics Diagrams
    • Economics Education and Careers
    • Environmental Economics
    • International Economics
    • Macroeconomics
    • Microeconomics
    Crypto Fomo and Panic Selling

    Avoiding Crypto FOMO and Panic Selling: Emotional Control in Crypto Investing

    bitcoin trading

    How to Trade Bitcoin with Only $100 for Beginners: A Complete Guide

    this image describes bear vs bull market.

    Bull vs. Bear Market: 8 Key Indicators to Watch in Crypto Markets

    How to Study for an Economics Exam

    Top 100 Dataset Websites & Sources for 2021

    “Capital in the Twenty-First Century” – a comprehensive master piece on world Economy and the reign of inequality

    Freakonomics: a book for unconventional thinkers and practical millenial economist

    Is the Study of Economics Truly a Science?

    What is Your Contribution to National Income?

    Trending Tags

    • Finance
      • All
      • Basic Financial Concepts
      • Corporate Finance
      • Personal Finance
      Crypto Fomo and Panic Selling

      Avoiding Crypto FOMO and Panic Selling: Emotional Control in Crypto Investing

      bitcoin trading

      How to Trade Bitcoin with Only $100 for Beginners: A Complete Guide

      this image describes bear vs bull market.

      Bull vs. Bear Market: 8 Key Indicators to Watch in Crypto Markets

      decentralised finance defi

      10 Best Tips for Choosing the Right DeFi Platform

      bitcoin

      5 Factors That Affect Bitcoin Prices and Volatility in the Financial Markets

      corporate event speaker

      How To Attract Industry Experts To Speak At Your Next Corporate Event

      Best 4 Personal Finance Software on Amazon

      The best invoicing softwares for small businesses

      5 Best Invoicing Software for Small Businesses

      Cryptocurrency: In Light of the Increased Volatility, Is It Worth the Risk?

      Trending Tags

      • Insurance
      • Investing
      • World
        • Markets & Industries
        • Public Economics & Finance
      No Result
      View All Result
      Write for Us
      EconGuru
      • Business
        • All
        • Accounting
        • Entrepreneurship
        • Management
        • Marketing
        • MBA
        Guest Experiences at hotel

        Exceeding Expectations: How Offering Unique Guest Experiences Can Drive Hotel Revenue

        Understanding Performance Reporting for Your Company

        Easy Ways to Ramp Up Security for Your Small Business

        3 Things You Should Know Before You Start a Web Design Firm

        5 Ways to Make Money When You Are Disabled

        5 Business Ideas You Can Run From Anywhere In The World

        5 Best Books to Learn Stocks Trading: Study for Successful Investing

        6 Best Real Estate Books to Get You a Solid Education In Real Estate Investing

        Must-Read 5 Best Business Books For Men And Women Who Love Success!

      • Economics
        • All
        • Basic Economic Concepts
        • Economic Data
        • Economic Mathematics
        • Economics Diagrams
        • Economics Education and Careers
        • Environmental Economics
        • International Economics
        • Macroeconomics
        • Microeconomics
        Crypto Fomo and Panic Selling

        Avoiding Crypto FOMO and Panic Selling: Emotional Control in Crypto Investing

        bitcoin trading

        How to Trade Bitcoin with Only $100 for Beginners: A Complete Guide

        this image describes bear vs bull market.

        Bull vs. Bear Market: 8 Key Indicators to Watch in Crypto Markets

        How to Study for an Economics Exam

        Top 100 Dataset Websites & Sources for 2021

        “Capital in the Twenty-First Century” – a comprehensive master piece on world Economy and the reign of inequality

        Freakonomics: a book for unconventional thinkers and practical millenial economist

        Is the Study of Economics Truly a Science?

        What is Your Contribution to National Income?

        Trending Tags

        • Finance
          • All
          • Basic Financial Concepts
          • Corporate Finance
          • Personal Finance
          Crypto Fomo and Panic Selling

          Avoiding Crypto FOMO and Panic Selling: Emotional Control in Crypto Investing

          bitcoin trading

          How to Trade Bitcoin with Only $100 for Beginners: A Complete Guide

          this image describes bear vs bull market.

          Bull vs. Bear Market: 8 Key Indicators to Watch in Crypto Markets

          decentralised finance defi

          10 Best Tips for Choosing the Right DeFi Platform

          bitcoin

          5 Factors That Affect Bitcoin Prices and Volatility in the Financial Markets

          corporate event speaker

          How To Attract Industry Experts To Speak At Your Next Corporate Event

          Best 4 Personal Finance Software on Amazon

          The best invoicing softwares for small businesses

          5 Best Invoicing Software for Small Businesses

          Cryptocurrency: In Light of the Increased Volatility, Is It Worth the Risk?

          Trending Tags

          • Insurance
          • Investing
          • World
            • Markets & Industries
            • Public Economics & Finance
          No Result
          View All Result
          EconGuru
          No Result
          View All Result

          Home Index Finance Basic Financial Concepts What Is a Balloon Payment?

          What Is a Balloon Payment?

          Anthony Carter by Anthony Carter
          May 13, 2011
          in Basic Financial Concepts
          0 0
          A A
          0
          Share on FacebookShare on TwitterShare on LinkedinShare on RedditShare on WhatsappShare by Email

          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.

          How a Balloon Payment Works

          You might also like

          Crypto Fomo and Panic Selling

          Avoiding Crypto FOMO and Panic Selling: Emotional Control in Crypto Investing

          January 9, 2025
          bitcoin trading

          How to Trade Bitcoin with Only $100 for Beginners: A Complete Guide

          December 23, 2024

          This type of payment gets its name because of the way it works. This is because the last payment or payments of the loan will tend to be quite large due to compound interest over the course of the loan. The lender may have only had to pay a modest amount in the past but now they have a large amount to pay at the end. There are many advantages to this type of arrangement and this is why a lot of people will chose this option.

          The Benefits of a Balloon Payment

          This type of payment agreement is perfect for those people who are expecting to have a lot of money in the future. Even though they might struggle to repay the loan if it was spread out equally over the term of it they can postpone paying a lot of money until further down the road. In the meantime they can make use of freed up capital to help their business grow and expend so that it will be in a better position to make the large payments required later. This money can also be used to invest with in the hope that it will provide a large sum that can be used to make the balloon repayment.

          Banks will not give this type of balloon loan unless they are sure that the borrower will be later able to make the large repayments requirements. If the creditor has no evidence of a future windfall they will be expected to set aside money each month which will later be used to make the payments. A vague hope that finances are going to improve in the future will not be enough to satisfy lenders. They will want more reassurance then this or else it would be too much of a risk.

          The fact that the repayment isn’t required until a later date means that the borrower is free to invest this money in the meantime. It would not be advisable to invest this money in high risk ventures though because it could mean that they have nothing when the time comes for payment of the loan. It is also recommended that those who do want to invest the money only choose low risk options.

          Some Final Thoughts on Balloon Payments

          This method for paying back a loan can be a good choice for those people who are confident of having a lot of money in the future. It is not a good choice for those who are uncertain about the future.

          Tags: balloon paymentcompound interestcreditorLoans
          Previous Post

          What is Cyclical Unemployment?

          Next Post

          What Is Business Research?

          Anthony Carter

          Anthony Carter

          Anthony Carter currently resides in Fife, Scotland with his wife Lisa, and their three wonderful children. As a senior editor for various publications, if he's not reading and writing, you would find him photographing and traveling to some of the most far-flung locations around the world.

          Related Stories

          Crypto Fomo and Panic Selling

          Avoiding Crypto FOMO and Panic Selling: Emotional Control in Crypto Investing

          by Heather Sloan
          January 9, 2025
          0

          Have you ever been a victim of crypto FOMO? Ever rushed to buy cryptocurrency because others were doing the same,...

          bitcoin trading

          How to Trade Bitcoin with Only $100 for Beginners: A Complete Guide

          by Heather Sloan
          December 23, 2024
          0

          Can you start Bitcoin trading with as little as 100 dollars?" Yes! And here is how you do it!  Most...

          this image describes bear vs bull market.

          Bull vs. Bear Market: 8 Key Indicators to Watch in Crypto Markets

          by Heather Sloan
          December 1, 2024
          0

          In the investment world, markets act as battlefields between the divinely powerful opportunities of bulls and bears. While a bear...

          decentralised finance defi

          10 Best Tips for Choosing the Right DeFi Platform

          by Heather Sloan
          December 1, 2024
          0

          10 Best Tips for Choosing the Right DeFi Platform Decentralized Finance (DeFi) transforms how humans manage their finances today by...

          Next Post

          What Is Business Research?

          What is EconGuru?

          EconGuru

          EconGuru was founded in 2006 by a group of Economics students who are passionate about learning and sharing everything in Economics, Finance, and Business.

          The mission is to improve economic and financial literacy of the general public so people can better understand and react to economic problems and make good financial decisions.

          We have no social profiles on any network, and if you like us, bookmark EconGuru.com or share us with your friends.

          Textbooks

          • Intro to Economics
          • Firms & Industrial Structure
          • Fundamentals of Ecology
          • Economics
          • Macroeconomics
          • Microeconomics
          • Useful Links

          © 2006 - 2022 EconGuru - Your premium guide for Economics, Finance, and Business. Privacy

          Welcome Back!

          Login to your account below

          Forgotten Password?

          Retrieve your password

          Please enter your username or email address to reset your password.

          Log In
          No Result
          View All Result
          Write for Us
          • Banking
          • Books & Textbooks
          • Business
            • Accounting
            • Entrepreneurship
            • Management
            • Marketing
            • MBA
          • EconGuru
          • Economics
            • Concepts
            • Microeconomics
            • Macroeconomics
            • Economic Data
            • Economic Mathematics
            • Economics Diagrams
            • Education and Careers
            • Environmental Economics
            • International Economics
          • Finance
            • Concepts
            • Corporate Finance
            • Personal Finance
          • History of Economics
            • Economists
          • Insurance
          • Investing
          • Markets & Industries
          • Public Economics & Finance
          • World Economy
          • Login

          © 2006 - 2022 EconGuru - Your premium guide for Economics, Finance, and Business. Privacy

          Are you sure want to unlock this post?
          Unlock left : 0
          Are you sure want to cancel subscription?