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Definition
A bullet repayment loan defers the entire principal to a single payment at maturity. Interest is paid during the term, but the balance is not reduced until the end — unlike an amortising loan that clears steadily.
Why it matters
It keeps interim payments low but demands a large sum at the end, so affordability must be tested against that lump, not just the interest. It suits situations where a known cash inflow will fund the repayment. See loan affordability.
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