What Is a Balloon Payment?
A balloon is a lump sum due at the end of your loan term, reducing your monthly repayments during the loan.
Pros
- Lower monthly repayments
- Improved cash-flow
- Ideal for business borrowers
- Can help you access newer, higher-value vehicles
Cons
- Higher total interest
- Larger end-of-term payment
- Requires planning ahead
When a Balloon Works Well
- You want lower monthly repayments
- You update your car regularly
- You’re self-employed or using the car for business
- You plan to trade in or refinance at the end
When It Doesn’t
- You hold onto cars for long periods
- You want the lowest total cost of finance
- You don’t want a large end payment
Hanna Lending’s Role
We calculate both structures for you, with and without a balloon, so you can see which is better for your situation.
