Simply speaking, balloon loan means less repayment in advance, and the remaining loan and interest should be paid off in one lump sum when the loan expires.

Balloon loan not only provides the lender with a shorter loan term, but also calculates the monthly payment with a longer term, which can greatly reduce the repayment pressure of the lender in the early stage. At the same time, because the loan term is generally short, the loan interest rate is correspondingly low. However, balloon loans are not suitable for all lenders. Once you choose a balloon loan, you must have a suitable repayment plan.

The content of this article comes from: China Law Publishing House "General Knowledge Series of Legal Life"

Do you know what balloon loan means when you borrow money?

Balloon loan, I don't know if you know anything about computers and mobile phones. What Bian Xiao is going to talk about today is such a new loan model, which can shorten long-term loans, greatly reduce loan interest rates and reduce the pressure on lenders. Come and see.

What is a balloon loan? Balloon loan is a mortgage loan product with a brand-new repayment method. The loan interest and part of the principal are repaid in installments, and the remaining principal is repaid at one time. Compared with the ordinary repayment method, the repayment amount of each installment in the early stage of balloon loan is small, but when the loan expires, there is still a large part of the loan principal remaining, which needs to be repaid by the borrower in one lump sum. It looks like a balloon, so it is called a "balloon loan". So what are the advantages of this loan method and what are the application conditions? You will know after reading this article.

"Balloon loan" is designed for customers who intend to hold loans in the short and medium term, that is, to provide them with a shorter loan term and use a longer term to calculate the monthly payment, so as to reduce the pressure of early repayment. At the same time, due to the short loan term, the expected annualized interest rate of the corresponding loan is also low. "Balloon loan" is a real poly-type mortgage product, and it is also the only mortgage product on the market that innovates for the expected annualized interest rate.

This loan model is more suitable for people who apply for first-hand housing mortgage loans from banks. Second-hand housing mortgage and housing mortgage customers. Of course, customers who already have mortgage loans in the bank can also transfer the loans and apply for balloon loans at the same time. Because the balloon loan is characterized by lowering the expected annualized interest rate of the loan and reducing the mortgage pressure by shortening the loan period. Although it is a short-term loan, it is as easy to repay as a long-term loan and enjoys a relatively low expected annualized interest rate.

Advantage analysis of balloon loan

1. The monthly supply pressure is low. Balloon loan can choose a shorter loan term (3 years, 5 years or 10 years), but if the monthly payment is calculated with a longer term (for example, 30 years), the pressure on monthly payment will naturally be reduced, and it is easy to repay the loan.

2. The repayment period is short. Because the balloon loan period is short, you can enjoy the corresponding lower expected annualized interest rate of the loan.

3. Good credit record. After the loan expires, if it is really necessary to refinance, and the repayment record is good, the bank will provide refinancing services.

This loan method of banks is generally aimed at customers who have the willingness to repay in advance and have the ability to repay in advance. If you belong to this category, you can feel free to apply for a balloon loan.

Summary: That's all about balloon loans. I believe that friends who see this place should already know about the balloon loan.

What does balloon loan mean?

Balloon loan means that the borrower pays less in the early stage of the loan and needs to pay off the remaining loan and interest in one lump sum when it is about to expire. "Balloon loan" is designed for customers who intend to hold loans in the short and medium term, that is, to provide them with a shorter loan term and use a longer term to calculate the monthly payment, so as to reduce the pressure of early repayment.

1. Balloon loan: it is a popular loan method abroad, a real interest-bearing mortgage product, and the only innovative mortgage product in the market.

2. The characteristics of balloon loans:

(1) "short loan and low supply", and the repayment pressure of each installment in the early stage is relatively small;

(2) The interest rate is low. Because the loan term of "balloon loan" is short, the corresponding loan interest rate is low, which can save loan interest;

(3) If the repayment record is good, the bank can arrange for refinancing after the balloon loan expires.

3. Applicable people for balloon loans:

(1) New customers who apply for first-hand housing mortgage loans, second-hand housing mortgage loans and housing mortgage loans from banks;

(2) Customers who already have mortgage loans in the bank can transfer the loans and apply for balloon loans at the same time.

4. Balloon loan applicable business:

Product analysis of first-hand housing loan, second-hand housing loan, housing plus mortgage loan and housing-to-mortgage loan

(1) Balloon loan is characterized by lowering the loan interest rate;

(2) by shortening the loan period;

(3) Although it is a short-term loan, it is as easy to repay as a long-term loan. In order to enjoy the corresponding lower loan interest rate.

5. Special advantages of balloon loan:

(1) The monthly pressure is small, so it is easier to buy a house through a "balloon loan" loan. You can choose a shorter loan term (3 years, 5 years or 10 years), but if you use a longer term (for example, 30 years) to calculate the monthly payment, the monthly payment pressure will naturally be reduced and the repayment will be easy.

(2) The repayment period is short and mortgage financing is easier. Because the term of "balloon loan" is short, you can enjoy the corresponding lower loan interest rate.

(3) The credit record is good, and the loan will be renewed upon maturity. After the loan expires, if it is really necessary to refinance, and the repayment record is good, the bank will provide refinancing services.

What is a balloon loan? What kind of person is it suitable for?

Balloon loan is a relatively novel loan method. As the name suggests, the "balloon loan" is directly named as "balloon loan" because its early repayment amount is small, but the repayment amount is large on the loan maturity date, forming a shape of "small before and big after".

Balloon loan is not suitable for everyone. Once you choose "balloon loan", you must have a good repayment plan, because the low monthly supply is only temporary, and the big tail of the balloon can not be ignored. This kind of loan is suitable for people who are short of funds but have high expectations for future income. When choosing the loan method of "balloon loan", you must have a clear grasp of the future repayment amount. Even if your income is improved to a greater extent, you must ensure that you are prepared for the future balloon tail.

Balloon loans are suitable for the following groups:

1. Considering short-term mortgage, there is demand for prepayment.

2. It is expected that in the near future (the longest 10 year), one's financial strength will be greatly improved, or there will be a lot of funds in the later period.

3. During the loan period, there is only a small part of each month, and the balance is used for other investment channels to obtain higher investment returns and dare to take risks.

4. Middle and high income class.