Balloon Loan

A balloon loan is a loan that leaves you with a lump sum payment at the end of the loan term. Car loans are typical examples of borrowing that might be a balloon loan. At the end of the loan period, you usually either choose to make the lump-sum payment or can refinance the remaining balance into another loan.
When getting a balloon loan, you should be aware that if you choose to refinance, you may not get the same interest rate as you were previously getting on the initial loan.