Balloon Loan: Difference between revisions
From Open Risk Manual
Wiki admin (talk | contribs) (Created page with "== Definition == A '''Balloon Loan''' is a type of Loan where a significant part of the Principal Amount is due and payable in a single payment on the Maturity Date...") |
Wiki admin (talk | contribs) No edit summary |
||
| Line 6: | Line 6: | ||
* A large balloon amount may imply an elevated [[Credit Risk]] at the maturity date, e.g. if the borrower is counting on refinancing the loan and financing conditions deteriorate unexpectedly | * A large balloon amount may imply an elevated [[Credit Risk]] at the maturity date, e.g. if the borrower is counting on refinancing the loan and financing conditions deteriorate unexpectedly | ||
== See Also == | |||
* [[Balloon Mortgage]] | |||
* [[Refinancing Risk]] | |||
---- | ---- | ||
[[Category:Loan Product]] | [[Category:Loan Product]] | ||
Latest revision as of 11:27, 10 June 2024
Definition
A Balloon Loan is a type of Loan where a significant part of the Principal Amount is due and payable in a single payment on the Maturity Date of the Loan.
Issues and Challenges
- A large balloon amount may imply an elevated Credit Risk at the maturity date, e.g. if the borrower is counting on refinancing the loan and financing conditions deteriorate unexpectedly
