What term describes a payment at the end of a loan period that includes the total outstanding balance?

The term that describes a payment at the end of a loan period that includes the total outstanding balance is a "balloon payment." This type of payment typically occurs in certain types of loans where smaller payments are made during the loan term, but a larger, final payment is due at the end to cover the remaining balance.

Balloon payments are common in various types of loans, including mortgages, where the borrower may pay interest for a set period before facing a lump sum payment at maturity. This structure can be beneficial for borrowers who may expect increased income or a financial windfall by the time the final payment is due. Understanding how balloon payments function is crucial for borrowers to ensure they are prepared for the larger sum due at the end of the loan period.