Loans Glossary - Balloon

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Loans Glossary

Balloon

What is a Balloon?

When you take out a loan according to the contract your paying small payments and the balloon comes in action when you pay a bigger amount as the loan or the lease has ended.

For example your paying periodically back the loan which you took. These periodic payments consist of small amounts until the bond reaches maturity then a large sum finalizes the contract. This last amount is made out of the remaining principal balance, interest and charges.

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