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


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