Balloon Payment
What does it mean
A Balloon Payment refers to the final payment required by a note for a loan that does not fully pay down to $0 as a result of the normal periodic payment that is required. Instead making the same periodic payment for the duration of the loan, the remaining balance of the loan is fully due as the final payment. In most cases, this balloon payment is refinanced into a new loan and normal payments continue.
Why does it matter
Balloon payments are a common term in banking, and understanding what it means is important for both the banker and the customer to understand.
Other Relevant Terms
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Greetings! I'm Clay Sharkey, and there is nothing I like more than assisting others in achieving their goals. I firmly believe that by enhancing a banker's understanding of their customer's' business, they can provide superior service. This superior service, in turn, leads to stronger relationships for the bank, improved performance for the businesses, and better experiences for our communities. Win-win-win.
