Are you considering an auto loan that offers balloon payments? Here's everything you need to know, including how it differs from regular car. When you're selecting a car loan, a key consideration is whether you wish to have a residual value or "balloon payment" on the loan, and, if so, how large you . Despite how it sounds, balloon payments have nothing to do with buying inflatable novelties, and everything to do with car loans and vehicle finance. This optional extra can help make your car loan repayments more affordable from month to month, though balloon payments may not.
Learn how you may be able to get out of a balloon car loan through refinancing your loan. Refinancing may help you avoid having to make your. Balloon payment deals allow you to drive a more expensive car than you could otherwise afford, by letting you pay a lower instalment over the. A balloon payment is based on the residual value or guaranteed future value of the vehicle. This is agreed at the start of the car finance agreement and is based .
Read our article to discover important information on balloon payments and residuals, including the pros and cons. Balloon loans have relatively low monthly payments temporarily. Standard loans like year fixed-rate mortgages and 5-year auto loans are. A balloon payment or residual payment is a popular option for business and personal car loans, here are our five tips to using them effectively. What is a balloon payment? Should you use one for your car loan? When do they come in handy and are there any pitfalls?.