Personal Loan

Balloon Payment
A balloon payment is a large, one-time payment made at the end of a loan term that is significantly larger than all previous payments. Often seen in both commercial and residential real estate financing, balloon payments also apply to business and personal loans.
Prepayment Penalty
A prepayment penalty is a fee paid by a borrower for the privilege of retiring a loan early. It is not a tax-deductible interest expense.

Accounting Terms Lexicon

Discover comprehensive accounting definitions and practical insights. Empowering students and professionals with clear and concise explanations for a better understanding of financial terms.