A balloon payment is a large sum of money that must be paid at the end of a loan. It is called a "balloon" because it is much bigger than the regular monthly payments. Full definition
This means that each monthly payment will be the same until a final balloon payment at the end of the loan term. (valuepenguin.com)
Interest will be higher and they normally come with balloon payments. (biggerpockets.com)
- Is there a way to structure this investment as a loan that has a variable rate based on net income and then some sort of balloon payment when sold? (biggerpockets.com)