{"id":802,"date":"2020-04-22T15:57:46","date_gmt":"2020-04-22T15:57:46","guid":{"rendered":"http:\/\/agricultureloan.com\/?p=802"},"modified":"2023-01-04T09:02:50","modified_gmt":"2023-01-04T09:02:50","slug":"balloon-loans-risky-farm","status":"publish","type":"post","link":"https:\/\/agricultureloan.com\/balloon-loans-risky-farm\/","title":{"rendered":"Why are Balloon Loans Risky for Your Farm?"},"content":{"rendered":"

When you need farm loan financing, you have several payment options including the balloon loan. The balloon loan is temporary financing. It\u2019s amortized over a long-term period, such as 20 or 30 years, but its maturity date is usually in a much shorter period, such as five years.<\/p>\n

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Keep reading to learn why a balloon loan may be risky for your farm.<\/p>\n

You May Owe the Full Principal Amount Quickly<\/h2>\n

The largest risk with the balloon loan for your farm is the amount of money you may owe in a short amount of time. Let\u2019s say you borrow $300,000 for your farm and only pay off $10,000 of that principal in five years. At the end of five years, your balloon loan matures, which means you owe $290,000 in full at that time. If you don\u2019t have it, you could go into default on the loan.<\/p>\n

Now, there are options, but there is no guarantee that it will work:<\/p>\n