- A payment or instalment that is made at the end of a specified loan term to pay off the remaining principal. This payment is larger than the regular payments that are made throughout the term of the loan.
Related Terms and Acronyms
- Balloon Loan — Definition,
- A loan in which the payments aren't set up to repay the loan in full by the end of the term. At the end comes the balloon payment -- one that is larger than the other, periodic payments and pays off the remaining principal.
- Balloon Mortgage — Definition,
- A loan that has regular monthly payments which amortize over a stated term but call for a final lump sum (balloon payment) at the end of a specified term, or maturity date, such as 10 years.
- Fixed Instalment — Definition,
- Periodic (usually monthly) payment on a loan whose sum does not vary.
- Instalment — Definition,
- The regular periodic payment that a borrower agrees to make the lender.
- Mortgage Payment — Definition, Important,
- A periodic payment used to pay off a mortgage's principal and interest.
- Step-rate Mortgage — Definition, Important,
- A fixed-rate home loan on which payments are lower at the beginning, typically for two years, and which then rise.