Bullet

Type of bond or loan which repays the entire debt in one amount at the end of a fixed period on the maturity date. Prior to the maturity or prepayment of the bond/loan interest payments are to be made in accordance with the payment schedule. Normally, corporate bonds pay off in lump sum principal, that is, are bullet paying bonds, whereas many mortgages, leases etc. pay off on an amortization basis. The final payment on a balloon loan is sometimes referred to as a bullet.