Final answer:
A balloon loan is a loan that provides for partial amortization over its term, followed by a balloon payment on the maturity date.
Step-by-step explanation:
A loan that provides for partial amortization over its term, followed by a balloon payment on the maturity date is known as a balloon loan. In a balloon loan, the borrower makes regular payments of both principal and interest for a specific period of time, typically 3 to 5 years. At the end of the term, there is a large lump sum payment, called the balloon payment, which repays the remaining balance of the loan.