A partially amortizing loan always will have:

A partially amortizing loan typically involves a situation where the borrower makes regular payments that cover part of the principal and interest during the term of the loan. However, because these payments do not fully pay off the loan balance by the end of the loan term, a significant portion of the principal remains due at maturity. This remaining balance, referred to as a balloon payment, must be paid in full to satisfy the loan.

The key characteristic of a partially amortizing loan is that, while regular payments help reduce the principal over time, the term is such that it does not entirely amortize the loan amount within that specific period. Thus, at the end of the loan term, the borrower is required to make a larger payment, which can be a substantial amount. This is what distinguishes partially amortizing loans from fully amortizing loans, where the payments are designed to fully pay off the principal and interest by the end of the term.

Understanding the nature of partially amortizing loans helps clarify why a balloon payment is an inherent feature of this type of financing, making it an essential aspect of recognizing how these loans operate in real estate and financial contexts.