Balloon Loans in Uganda
Balloon Loans
With a balloon payment loan, the final payment includes a large portion of the principal (the original amount borrowed).
Balloon payment loans allow you to negotiate how much principal will be paid at the end of the loan term. The two most common options are:
- You will be able to repay some part of the principal along with interest (our fee for the loan) every month, and pay back the remaining balance of principal on the loan maturity date (i.e., when the loan is due).
- You can pay monthly installments of interest only and then pays back all the principal when the loan is due.
Balloon payment loans are good for you because of the flexible repayment options and predictable demands on their cash flow—as long as you are sure you can be able to make the final balloon payment. Often, some clients as for the payment to be refinanced on or before the maturity date, which means the old loan is settled and replaced with a new loan with a new maturity date.
Benefits
- Affordable and attractive interest rates
- Swift processing within 24 hours
- Flexible repayment arrangement
- Low or no initial payments
- Enables borrowers to access affordable short-term capital
- Can help cover financing gaps
Key Requirements
- Proof of source of income
- Postdated Cheque (loan + interest) for this balloon payments
- Completed Loan application form
- Change of allotment (if required)
Options at the end of a balloon loan
When this balloon payment comes due, you may have a few options, depending on the lender. Here are a few.
- Make the balloon payment and keep the asset if the loan was used to buy a car.
- You can refinance the loan balance and retain possession of the asset.
Balloon Payments Explained
Balloon payments are generally defined by being at least twice as large as regularly scheduled payments.
By making one large lump sum payment, balloon loans allow borrowers to lower their monthly loan repayment costs in the initial stages of paying back a loan.
Balloon loans usually have shorter terms than traditional installment loans, with the large payment typically due after a few months or years.
Balloon payment structures are most commonly used for business loans and money lenders, though they are also available on auto loans and mortgages.
Recap
A balloon loan is a type of loan that includes lower monthly payments in exchange for a larger one-time payment at the end of your loan term.
If you are a money lender or plan to finance your asset purchase, you may be offered the option of a balloon loan at Goldmine Finance.
Balloon payment loans are set up over a short-term period, marked by small, consistent payments throughout the duration of the loan. You will pay the remaining balance to Goldmine Finance as a much larger final payment when the loan term ends. This large final payment is what we call a ‘balloon payment.
Balloon payment loans are good for companies that want flexible repayment options and predictable demands on their cash flow—as long as they’re sure they will be able to make the final balloon payment. Often, the balloon payment ends up being refinanced on or before the maturity date, which means the old loan is settled and replaced with a new loan with a new maturity date.