Bullet Loan


DEFINITION of 'Bullet Loan'

Any loan that requires a balloon payment at the end of the term and anticipates that the loan will be refinanced in order to meet the balloon payment obligation.


These loans are riskier because the homeowner''s equity in the property doesn''t increase over time.

  1. Amortization

    1. The paying off of debt in regular installments over a period ...
  2. Bullet Repayment

    A lump sum payment for the entire loan amount paid at maturity. ...
  3. Bullet Bond

    A debt instrument whose entire face value is paid at once on ...
  4. Bullet GIC

    A type of guaranteed investment contract where a single payment ...
  5. Bullet

    1) A one-time lump-sum repayment of an outstanding loan, typically ...
  6. Encumbrance

    A claim against a property by a party that is not the owner. ...
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  1. Student loans, federal and private: what's the difference?

    The cost of a college education now rivals many home prices, making student loans a huge debt that many young people face ... Read Full Answer >>
  2. Can my IRA be used for college tuition?

    You can use your IRA to pay for college tuition even before you reach retirement age. In fact, your retirement savings can ... Read Full Answer >>
  3. How does a bank determine what my discretionary income is when making a loan decision?

    Discretionary income is the money left over from your gross income each month after taking out taxes and paying for necessities. ... Read Full Answer >>
  4. What is the difference between accrued revenue and accrued interest?

    The difference between accrued revenue and accrued interest is that the former represents accumulated income that has not ... Read Full Answer >>
  5. What is the difference between "closed end credit" and a "line of credit?"

    Depending on the need, an individual or business may take out a form of credit that is either open- or closed-ended. While ... Read Full Answer >>
  6. In what instances does a business use closed end credit?

    The most common types of closed-end credit used by both businesses and individuals are mortgages and auto loans. Businesses ... Read Full Answer >>

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