Let's say a loan has an amortization period of 10 years with a 7-year term. You'll have to make regular monthly payments for the first 7 years. Then at the end of the term, you'll have to make a balloon payment for the remaining 3 years of the amortization. A balloon payment refers to a large payment at the end of a loan (which in this example, is the total payment for the remaining three years).