Question

What is a 'balloon payment'?

A A payment with inflated interest due to late payment Correct Answer Incorrect Answer
B A large payment due at the end of a loan Correct Answer Incorrect Answer
C A promise of payment not necessary executed at that time Correct Answer Incorrect Answer
D A small payment made out of the total inflated debt Correct Answer Incorrect Answer
E None of these Correct Answer Incorrect Answer

Solution

A balloon payment is a large payment due at the end of a balloon loan, such as a mortgage, commercial loan or other amortized loan. A balloon loan typically features a relatively short term, and only a portion of the loan's principal balance is amortized over the term. At the end of the term, the remaining balance is due as a final repayment.

Practice Next

Relevant for Exams:

×
×