• It's when you have a scheduled large payment, usually because you have smaller monthly payments, and it basically brings your balance more up to date. It is supposed to give you the opportunity to save some money, but you have to be very diligent so you'll be able to pay the balloon payment! I didn't even know they still did that.
  • Balloon payments are normally used for people trying to establish credit. Usually you have to pay a balloon payment upfront or one at the end of the loan.Sometimes both.The term Balloon is used to indicate an inflated amount.

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