A table displaying loan payments, broken down by interest and principal, is a common financial tool. Sometimes, a loan agreement includes a substantial final payment, differing significantly from the preceding payments. This large, lump-sum due at the end of the loan term requires careful planning to ensure sufficient funds are available.
The inclusion of a final large sum can initially lower monthly payments, making larger purchases more accessible. This approach can be useful when income is expected to increase, allowing for easier payment of the final balance. The historical context reflects scenarios where individuals or businesses anticipate future financial growth or asset sales to cover this final obligation.
