If you decide to take out balloon vehicle finance, you'll need to consider what will happen if you are unable to settle the balloon payment at the end of the loan term. You may loose the vehicle even after you've paid all those years or you may have to take out another loan to settle the balloon payment. Also take into account that not being able to make the balloon payment will damage your credit rating. Because of the fact that you are only paying interest on the finance towards the end of the term, you are likely to pay more for the vehicle than its actual value, making it more complicated to sell the vehicle again. Make sure you are in fact able to pay the monthly instalment; and look long-term as well as your payments may increase over time as interest rates fluctuate. Balloon finance can be a very good option in certain situations but you should always be mindful of the possible dangers and pitfalls. Plan well ahead to ensure you will be able to settle the balloon payment at the end of the term. Avoid drawbacks by doing proper research and by planning and taking worst case scenarios into account.Balloon vehicle finance is a loan that is eventually paid off with one large payment whereas with 'regular' vehicle finance you would consistently make the same payment until the balance is paid off. With balloon finance the monthly payments are smaller but they are generally not high enough to pay off the loan and a final payment is then required to settle the loan amount. Before you take out balloon ca借貸財務r finance Before you decide to take out balloon car finance, you need to plan well in advance. You will need to save or invest so that you will be able to settle the final residual as re-financing a balloon payment is not easy. Some finance companies will extend the agreement at the end of the term, but this is not the norm. If you, worst case scenario, lost your car towards the end of the term, with normal car finance you could still purchase it back fPersonal Loanor much less than you would be able to with balloon car finance.