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View Full Version : Balloon Option?



Leekiwwi
05-16-2005, 09:15 PM
Can someone explain to me how the Balloon Otpion works for payments?
and Most important, how much extra in total is it normally, compared to a normal financing term?

PLease and Thank you

69cougar
05-16-2005, 09:18 PM
Ballooning has got to be one of the stupidest things you can do financially. All they do is reduce your monthly payment which is how 90% of people buy cars these days. The payments look really good until you see that at the end of 60 months now even 92 you will still owe $xxxx (usually around 6-10,000) for the vehicle. A ballon payment usually means you end up spending about 20% more than what the car is really worth. IF the balloon monthly payment works for you llok for somthing else with a 60 month fixed tern at the same cost

Calgarian
05-17-2005, 11:54 AM
Balloon Loans are an alternative to leasing a vehicle and are suited to individuals whose incomes fluctuate over the year or for thoughs who expect to see an increase in income within the loan amortization. Most balloon loans allow principal only payments at any time without penalty something not available on a lease. For those just wanting to get into a better vehicle this option does help although interest cost will make the total purchase some what more expensive depending on the rate.