Avoid balloon payments if you're already stretched

Published 5 Aug 2020

A balloon payment is a large payment made by the borrower at the end of a car loan, to finalise the loan. A balloon payment allows a borrower to get a loan with a low interest rate and a short term. The problem with this payment scheme is that it makes financing your car appear less expensive than it actually is, especially if your monthly repayments are already pushing you to your financial limit.

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