## What Is It?

A balloon payment is the final payment due on a balloon or an interest-only loan, which is paid at the end of the loan term.

For amortizing balloon loans, which have an amortization period that is longer than their term, the balloon payment will equal to the remaining loan balance at the end of the loan term.

For interest-only loans, the balloon payment will equal to the full starting balance of the loan, since the loan principal is not paid down throughout the loan term.