What is a balloon payment? Is this an option for you? A balloon payment is a large lump sum payment made at a specific interval usually at the end of a long-term balloon loan. I am only familiar with being used in mortgages; however I imagine they could do this for automobiles. Some benefits to taking out a balloon loan would be a lower amount for the downpayment and a lower interest rate. I would not recommend this if you are not good at managing your money and preparing for the day when you have to make this lump sum payment. However, if you are a great investor and can maximize the capital then I would say take a chance.
