If you are a person who must decide on getting that loan, it is recommended that you calculate this very carefully. It will cause them to pay higher interest than normal loan payment interest. And they may decide to ask for changing to common loan payment. There are risks for agreeing with this type of loan, especially if people couldn't pay the agreed balance at the end of loan period.
For example, they have invoices that will be paid when their projects are completed.
This type of loan is usually taken when people or companies are confident that they will have those big amount of money on particular time. Small amount in the beginning but leave a very big amount at the end of loan period. It is called balloon because this payment method can be described as inflatable balloon. Common payment term for this payment method is Balloon Loan Payment. In this method you must decide to pay the loan off before you are approved to get the loan. It is different from general loan payoff.
I just found out that I haven't created a loan template that will simulate a loan with possibility of paying the loan off after specific period. In this site, you can find several loan spreadsheets that should help you evaluating your financial situation when you plan to purchase a new house or vehicles.
