Some alternative loan repayment methods that could be considered instead of an interest-only period or balloon payments include standard amortizing loans, graduated payment loans, and income-driven repayment plans. Standard amortizing loans require the borrower to make regular payments of both principal and interest, which ensures the loan is paid off by the end of the term. Graduated payment loans start with lower payments that increase over time. Income-driven repayment plans adjust the monthly payment based on the borrower's income and family size.
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In the early 2000s, Hertz flourished and decided to expand aggressively into the consumer travel market. To do so, they obtained a substantial loan for this ambitious venture. Before diving into the more common aspects, let's explore the concepts of an interest-only period and balloon payments, which can mean the difference between a loan that's a stepping stone to success and becomes a financial burden.