What type of payment structure is associated with a partially amortized loan?

A partially amortized loan features a payment structure where regular payments are made over the loan term, but these payments do not cover the full amount of the principal and interest. As a result, at the end of the term, a remaining balance, known as a balloon payment, is due. This means that while the borrower is making consistent payments throughout the loan period, the final amount owed is significantly larger than the preceding payments, making the last payment a large lump sum designed to pay off the remaining balance.

This structure is often appealing as it can allow for lower monthly payments compared to fully amortized loans, while also enabling borrowers to avoid tying up large amounts of capital in real estate for the entire duration of the loan. The balloon payment at the end requires borrowers to plan ahead for that final obligation, which differentiates it from other loan types such as fully amortized loans, where the total debt is cleared by the end of the term.