Investor Glossary-balloon loanInvestor Glossary-balloon loanInvestor Glossary-balloon loanInvestor Glossary-balloon loanInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Balloon Loan

The HTML to link to this page
 

A balloon loan is any loan that has one final large payment called the balloon payment due at the end of the loan period. Bullet loan and balloon note are also common terms for the balloon loan. A balloon loan may be short-term or long-term. Before the balloon payment, a balloon loan may have partially amortizing or interest only payments. The balloon loan is most common in real estate, in which case it is often called a balloon mortgage. (For the lender, balloon loan default is a serious risk, but as excellent collateral, interest in the title to real property mitigates this risk.) The advantage of a balloon loan is that payments are very low relative to the principal borrowed. The usual assumption is that the final payment of the balloon loan will be met through either refinancing, sale of the collateral, or another anticipated cash flow event.



Rate this balloon loan definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: Key Rate Duration, margin rate, stock split, irrevocable trust, required rate of return, 1031 exchange, debt service coverage, ex-dividend, ex-dividend date, covered put, 401a, average price per share, Zero Cost Collar, deferred tax, liquidity ratio, phantom income, reverse mortgage, current ratio, 1035 exchange, inflation, class C shares, balance sheet, per diem, diluted share, wholly-owned subsidiary, annual return, VIX, option premium, limit order, EBITDA, deferred revenue, stock market close, APR, in escrow, FICO score, command economy, implied volatility, open position, risk management, dividends payable, real GDP, 144a, FTSE, minority interest, LIBOR, cancelled check, labor relations, retained earnings, quality assurance


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use