What is described as a payment at the end of a loan period that includes the total outstanding balance?

The term that best describes a payment made at the end of a loan period that includes the total outstanding balance is a balloon payment. This type of payment is characterized by its larger size compared to regular periodic payments made throughout the life of the loan. Typically, a balloon payment occurs when the borrower makes smaller payments over the term of the loan, with all or most of the principal balance due at the end.

In a balloon loan structure, the borrower benefits from lower monthly payments initially but must prepare for the substantial final payment when the loan matures. This payment often catches borrowers off guard, as they may be accustomed to the smaller monthly payments, which can lead to financial planning challenges.

Other terms, while related to payment structures in loans, do not accurately capture the specific nature of a balloon payment. Payment in arrears refers to payments that are made after the services have been rendered or the loan terms fulfilled. The concept of a final payment could refer generically to any last payment but does not necessarily imply the total outstanding balance inclusion. Closing costs include fees associated with the initiation of a loan, rather than payments made over the life of it.