A balloon loan is a loan with fixed monthly payments that will amortize it over a stated term (for example, 20 years), but requires an additional lump sum payment of the principal balance, in full, at an earlier date (for example, 10 years).
A balloon loan is a loan with fixed monthly payments that will amortize it over a stated term (for example, 20 years), but requires an additional lump sum payment of the principal balance, in full, at an earlier date (for example, 10 years).