The balloon payment method differs from other loan repayment strategies in that it involves making a large, lump-sum payment at the end of the loan term. This means that while regular monthly payments are relatively low, a large payment will have to be made at the end of the loan term. This can be a surprise if more preparation is needed. Compared to other strategies, this method may allow for lower monthly payments but requires a significant amount of money to be available at the end of the loan term.
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