balloon loan

noun

1. a loan in respect of which interest and capital are paid off in instalments at irregular intervals

Example Sentences

“A two-week balloon loan priced at 400 percent is just inherently unsuitable for people who are in the red every month with their basic expenses,” King said.

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Homeowners had assumed that their houses would continue appreciating in value and that they would be able to borrow against the equity to pay off the balloon loan.

Read more on Time Magazine Archive