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BALLOON PAYMENT

TheLaw.com Law Dictionary & Black's Law Dictionary 2nd Ed.

The large, final payment that is due when a loan ends. This most frequently refers to home loans, car loans or similar, where the final balloon payment will pay off the entire amount of the loan that weren’t covered by monthly amounts due. In many states, balloon payments primarily for personal or family household use are prohibited or they may require the lender to allow refinancing of the balloon payment before going to collection.

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