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. Maturity

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

    1. When a business or person revises a payment schedule for repaying ...
  5. Bullet Bond

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

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

    Mortgages: Fixed-Rate Versus Adjustable-Rate

  2. Budgeting

    Mortgages: How Much Can You Afford?

  3. Home & Auto

    The Benefits Of Mortgage Repayment

  4. Home & Auto

    When (And When Not) To Refinance Your ...

Hot Definitions
  1. Capitulation

    When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into ...
  2. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  3. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  4. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  5. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  6. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
Trading Center