Finance: What is Balloon Interest, or a Balloon Payment?

Balloon loans, unlike common loans, are paid off all at once, at the end of the loan's duration (with interest paid along the way).

[@christieturner5567]

omg that is a horrible way to buy a house. thank you for the education

[@hasher22]

This happens with car loans too as I am researching into it. They offer you a % of the total loan as a balloon. So if I get a 50k loan and put down 50% balloon, yeah my repayments are significantly lower but at the end of my 5 year loan, I have to fork out 25k! Crazy hey, I either have to sell my car and pay them back. But hey, I could get another balloon loan again! so it's a never ending cycle of balloon loans lol

[@Azzosauros]

@@hasher22 no. You trade the car in and get a brand new car

[@a19spyro95]

Are you effectively expected to have the full 400k by the end of the 30 year period then, or can you make multiple payments that are completely towards the principle post 30 years.

[@DaGrizouch]

I realize you're trying to make these videos entertaining but I would actually like to see a more straightforward, even dryer video about just the facts, personally.

[@anrgyauburn6723]

I thought it was funny lol