What is the difference between a residual and a balloon?
A balloon payment is the lump sum payment which is due at the end of the loan contract should a customer choose to include a balloon in their finance option. A residual value is the estimated value of the asset at the end of the lease contract should a customer choose to include a residual in their finance option. The residual is due at the end of the contract. A residual value attracts a charge of GST. Both residuals and balloon payments help to lower your monthly loan repayments throughout the term and are due as a lump sum payment at the end of the contract. Some of the options at the end of the term include: • Refinance the balloon or residual at the end of the term • Sell or trade in your vehicle and use the subsequent funds to make the final payment and finance a new vehicle. Some customers choose to refinance the balloon or residual at the end of the term if they are maintaining ownership of their asset and keeping it longer than they expected. As always, you should consult your
