Definition
A large lump-sum payment of remaining principal due at the end of a loan term that did not fully amortize.
Example
The commercial loan amortized over 30 years but matured in 7, leaving a substantial balloon at maturity.
Related terms
Frequently asked questions
What does Balloon Payment mean in real estate?
A large lump-sum payment of remaining principal due at the end of a loan term that did not fully amortize.
How is Balloon Payment used in practice?
The commercial loan amortized over 30 years but matured in 7, leaving a substantial balloon at maturity.
This definition is provided for educational purposes. Legal and tax terminology can carry jurisdiction-specific meaning — confirm with a licensed professional before relying on it in a transaction.