Bullet Repayment

AAA

DEFINITION of 'Bullet Repayment'

A lump sum payment for the entire loan amount paid at maturity. A bullet repayment is often linked to ballon loans or similar products. Bullet repayments are usually built in to the terms of the loans.

INVESTOPEDIA EXPLAINS 'Bullet Repayment'

For example, when a person has a five-year mortgage which is paid off in a lump sum at the end of the five-year term, this payment is considered a bullet repayment. Generally, the borrower only pays interest during this time, while the principal balance of the loan is due at the end of the term.


For large loan amounts, such as mortgage loans, refinancing is usually required in order to pay the entire bullet repayment amount.

RELATED TERMS
  1. Mortgage

    A debt instrument, secured by the collateral of specified real ...
  2. Lien

    The legal right of a creditor to sell the collateral property ...
  3. Bullet Bond

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

    The period of time for which a financial instrument remains outstanding. ...
  5. Refinance

    1. When a business or person revises a payment schedule for repaying ...
  6. Bullet GIC

    A type of guaranteed investment contract where a single payment ...
Related Articles
  1. Credit & Loans

    Mortgages: Fixed-Rate Versus Adjustable-Rate

    Both of these have advantages and disadvantages depending on your financial needs and prospects.
  2. Budgeting

    Mortgages: How Much Can You Afford?

    Answering this means number-crunching as well as factoring in other considerations and expenses.
  3. Home & Auto

    The Benefits Of Mortgage Repayment

    Buying a home may be the biggest debt you'll ever incur. Learn why you should retire it sooner, rather than later.
  4. Home & Auto

    When (And When Not) To Refinance Your Mortgage

    There are both good and bad reasons to refinance. Learn more about both here.
  5. Credit & Loans

    Can You Live A Debt-Free Life?

    Avoiding loans goes against the norm but it can be possible - and enjoyable.
  6. Credit & Loans

    Interest-Only Mortgages: Home Free Or Homeless?

    These loans can be beneficial, but for many borrowers, they present a financial trap.
  7. Options & Futures

    Home-Equity Loans: The Costs

    Learn the factors to consider when comparing the different programs offered by various lenders.
  8. Options & Futures

    Payday Loans Don't Pay

    Hold too tightly to this rescue line and you'll soon be drowning in debt.
  9. Credit & Loans

    You CAN Afford To Study Abroad

    Before you jump on the plane, understand the rules and regulations in place. Then, enjoy your time studying aborad!
  10. Home & Auto

    Lending From A Loan Officer's Perspective

    Learn how a loan officer thinks, so that you can get the best and safest loan.

You May Also Like

Hot Definitions
  1. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  2. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  3. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  4. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  5. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
  6. Accrued Interest

    1. A term used to describe an accrual accounting method when interest that is either payable or receivable has been recognized, ...
Trading Center