What type of payment remains constant over the loan period but leaves an outstanding balance at the end?

A balloon payment is a specific type of loan structure where the borrower makes regular payments that cover only the interest or a part of the principal for a certain period. As a result, while the monthly payments remain consistent throughout the term of the loan, a significant amount of the principal remains unpaid. At the end of this period, the borrower must pay off the entire remaining balance in one large final payment, known as the balloon payment.

This loan structure is commonly used in short-term financing options, such as certain types of mortgages or commercial loans, where the borrower anticipates being able to refinance or sell the property before the balloon payment comes due. The predictability of the constant payment amount can make budgeting easier for borrowers, but it can also lead to financial challenges if the borrower is unprepared for the large sum due at the end of the term.

The other options refer to different payment structures: accelerated payments typically imply a repayment plan that involves higher payments to pay off a loan faster; satisfaction payments are related to concluding or paying off loans entirely without a focus on outstanding balances; and escalation payments pertain to a structure where payments increase over time, usually tied to some index or rate. These do not fit the description of maintaining constant payments while leaving an