A balloon payment on a hard money loan is a  lump-sum payment due at the end of the loan term usually for the remaining principal balance owed.  Hard money loans are short-term, asset-based loans often used for real estate investments. Borrowers make smaller interest-only or minimal principal payments during the term, with the remaining balance due in full at the end. This structure allows investors to only pay the minimum interest only payment during the loan term, but they must be prepared to refinance, sell the property, or pay off the balloon payment when it comes due.