balloon payment
The final, oversized payment due at the maturity date of a loan. Typically used in car or home loans, the balloon payment consists of the remaining balance due under a loan, including any unpaid principal and interest.
Definition from Nolo’s Plain-English Law Dictionary
A large final payment due at the end of a loan, typically a home or car loan, to pay off the amount the monthly payments didn't cover. Many states prohibit balloon payments in loans for goods or services that are primarily for personal, family, or household use, or require the lender to let the borrower refinance the balloon payment before forcing collection.
Definition provided by Nolo’s Plain-English Law Dictionary.
August 19, 2010, 5:11 pm
