Car Loan Balloon Payment Options
What is a balloon payment and how can it affect my loan repayments?
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What is a Balloon Payment?
Unlike conventional loan at the end of the loan term you will have payout the car loan in full. With balloon payments you still make your weekly or monthly payments, but at the end of the loan contract you make a larger payment than the other repayments. Essentially, a balloon loan is a sum of agreed money, which will be paid at the end of the loan contact.
Benefits of Balloon Payments
With balloon payments you keep your monthly payments low, as most balloon loans don’t take the balloon amount into account.
How will a Balloon Effect my Payments?
The way that balloon payments are structured you end up paying less each month they with a conventional loan.
When should I use a Balloon Payment?
There are some risks associated with a balloon loan. The most significant is at the end of the balloon loan you must make the balloon payment. If you fail to do so you will damage your credit and the car will be taken from you.
A Balloon loan is an inexpensive option for people who like to change their car every 5 years or so. We recommend that you put your car up for sale a few months before the balloon loan is going to end so that you have the money to pay the balloon then find a new car and apply for another balloon loan. Apply for a balloon loan.
Finance Steps
- Get Pre-approval
- Find the Car you want
- Negociate the best price
- Drive your new car
Use our car loan calculator
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