The term "balloon payment" refers to the final and often larger payment on a debt, typically occurring after a series of smaller payments have been made. This type of payment structure is commonly seen in loans and mortgages, where the borrower pays smaller amounts over time and then makes a larger final payment to fully satisfy the debt. This can be advantageous for the borrower, as it allows for more manageable payments over time. However, it is important to carefully consider the terms of a balloon payment and ensure that it is financially viable in the long run.
