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    Question

    What is a 'balloon payment'?

    A A payment with inflated interest due to late payment Correct Answer Incorrect Answer
    B A large payment due at the end of a loan Correct Answer Incorrect Answer
    C A promise of payment not necessary executed at that time Correct Answer Incorrect Answer
    D A small payment made out of the total inflated debt Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    A balloon payment is a large payment due at the end of a balloon loan, such as a mortgage, commercial loan or other amortized loan. A balloon loan typically features a relatively short term, and only a portion of the loan's principal balance is amortized over the term. At the end of the term, the remaining balance is due as a final repayment.

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