BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Short-term Loans
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Intermediate term Loans
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Long term Loans
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Both A and B
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Detailed explanation-1: -A balloon loan comprises a stream of constant payments followed by a large payment at the end, which is called the balloon payment. In contrast, a fully amortized loan is composed of equal payments, which are paid through the life of the loan. The balance at the end of the payments, in such a case, is zero.
Detailed explanation-2: -Balloon payments or bullet payments are common for certain types of debt.
Detailed explanation-3: -Balloon payments are an option for home mortgages, auto loans, and business loans. Borrowers have lower initial monthly payments under a balloon loan.
Detailed explanation-4: -A balloon payment is a lump sum owed to the lender at the end of a loan term after all regular monthly repayments have been made. This allows you to repay only part of the principal of your loan over its term, reducing your monthly repayments in exchange for owing the lender a lump sum at the end of the loan term.