Balloon Auto Financing Smart Alternative To Leasing


Frequently Asked Questions about Balloon Auto Financing

Here are the answers to some of the most commonly asked questions about balloon auto financing.

What is balloon auto financing?

Balloon auto financing is a hybrid loan that combines the best features of both leasing and conventional car loans. With no down payment, you enjoy monthly payments that are as low as those of a lease for a specified term. Once the term is up, you can return the car, keep it and refinance the balance, or sell or trade in the car.

How do I apply for balloon auto financing?

You can apply for several free quotes on balloon auto financing by filling out our short application. The application will take you only a few minutes to fill out. Once you submit your application, we will match you with lenders who can provide you with competitive quotes on balloon auto financing.

How does balloon auto financing compare to a lease?

Balloon auto financing gives you all the benefits of a lease but a lot more flexibility. Unlike with a lease, you will actually own the vehicle if you choose balloon auto financing. You will enjoy low monthly payments, similar to what you would pay on a lease. While most leases require a down payment, balloon auto financing does not. Balloon auto financing also gives you more options at the end of the term than leasing. You can return the car to the dealership with balloon auto financing, but you can also keep the car, sell it, or trade it in.

Should I choose balloon auto financing or a traditional car loan?

This largely depends on your financial situation and goals. If you need more payment flexibility in the beginning of your loan, balloon auto financing offers you the convenience of low monthly payments for a term of anywhere from 2-5 years. You will also have the freedom of avoiding a down payment, which can save you a bundle. Thus, if you don't want to make a down payment, would like low monthly payments, and would like to own your car, balloon auto financing makes more sense.

Why is it called "balloon auto financing"?

Balloon auto financing gets its name for what happens when your initial payment period expires. The "balloon" portion refers to the payment you would make on the outstanding balance (a balloon payment) if you chose to keep the vehicle. Keep in mind that you can refinance the remaining balance and keep the car, which means you can continue to enjoy low monthly payments.

What if I can't pay the balance at the end of my term?

If you can't or don't want to pay the outstanding balance on your balloon auto financing loan at the end of the term, you have several options. You can refinance to get reduced interest rates and payments. You can also return the car to the dealership in lieu of the balance. Similarly, because you have all the benefits of ownership, you can also sell or trade the car in.

Before you go to the dealership, make sure you read about dealership scams.


You can choose to trade, sell, return, or refinance the car at the end of the term

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