Balloon-payment loan | Article about balloon-payment loan by The Free Dictionary
A type of loan agreement, whether or not secured by a mortgage, in which the final payment due at maturity is much larger in amount than each of the periodic payments required during the life of the loan.
References in periodicals archive
Renewable balloon-payment instruments where the creditor is both unconditionally obligated to renew the balloon-payment loan
at the consumer's option (or is obligated to renew subject to conditions within the consumer's control) and has the option of increasing the interest rate at the time of renewal.
The rule is designed to protect consumers from securing short-term and balloon-payment loans
without the ability to repay according to the terms of the agreement.
These longer-term loans often referred to as balloon-payment loans
often require access to the borrowers bank account or auto title.