Bullet Repayment

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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. Bullet

    1) A one-time lump-sum repayment of an outstanding loan, typically ...
  3. Balloon Payment

    An oversized payment due at the end of a mortgage, commercial ...
  4. Lien

    The legal right of a creditor to sell the collateral property ...
  5. Maturity

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

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