Comments on: What is the difference between a finance and a balloon finance? http://www.quickdebteliminator.com/personal-finance/what-is-the-difference-between-a-finance-and-a-balloon-finance/ Call 888-653-9681 To Get Debt Help Now! Tue, 20 Mar 2012 16:05:26 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: dieterzakas http://www.quickdebteliminator.com/personal-finance/what-is-the-difference-between-a-finance-and-a-balloon-finance/#comment-570 dieterzakas Sun, 04 Jan 2009 12:18:38 +0000 http://www.quickdebteliminator.com/personal-finance/what-is-the-difference-between-a-finance-and-a-balloon-finance/#comment-570 Traditional financing means your payments are the same every month for the life of the loan, e.g., $500. In balloon financing, your payments will be lower, except at the end; this will be several times higher. In such an arrangement, your payment may be $350, but your final balloon payment might be $7000. The latter type of financing is what trips up people, as they're able to make the smaller monthly payments at least until something happens - they lose their job, the economy turns sour, they have huge medical expenses, etc. Then they find themselves unable to make that balloon payment. When exploring your options, have you crunched your numbers to be able to afford that car? (This is an important step in preparing for a big-ticked purchase.) Next, do you have enough money saved to be able to cover that balloon payment? Traditional financing means your payments are the same every month for the life of the loan, e.g., $500.

In balloon financing, your payments will be lower, except at the end; this will be several times higher. In such an arrangement, your payment may be $350, but your final balloon payment might be $7000.

The latter type of financing is what trips up people, as they’re able to make the smaller monthly payments at least until something happens – they lose their job, the economy turns sour, they have huge medical expenses, etc. Then they find themselves unable to make that balloon payment.

When exploring your options, have you crunched your numbers to be able to afford that car? (This is an important step in preparing for a big-ticked purchase.) Next, do you have enough money saved to be able to cover that balloon payment?

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