Repayment structure where principal comes due in one large maturity payment rather than being reduced steadily over time.
Bullet repayment is a repayment structure where principal comes due in one large payment at maturity instead of being reduced steadily through amortization. The phrase describes the repayment pattern itself, not just one specific product.
Bullet repayment matters because it shows where repayment risk sits. A borrower may look comfortable during the term because principal payments are deferred, but the real test comes at maturity when the full balance must be repaid or refinanced.
That structure appears in loans, some bond issues, and other financing arrangements where the issuer or borrower expects a back-end liquidity source.
Bullet repayment is common when:
a project is expected to generate cash near the end of its life
the borrower plans to refinance rather than fully self-fund repayment
the issuer wants to preserve cash flow during the life of the financing
| Structure | Principal pattern | Typical implication |
| — | — | — |
| Bullet repayment | Principal due mostly at maturity | Lower near-term cash burden, higher maturity risk |
| Amortizing repayment | Principal reduced over time | Higher periodic payments, lower final balance shock |
| Balloon repayment | Large final payment after some reduction | Middle ground between pure bullet and full amortization |
A company issues debt with semiannual coupon payments and full principal due in five years. The coupons service the debt during the term, but the full face amount remains outstanding until maturity. That is bullet repayment.
The same pattern can also appear in a loan where the borrower pays interest periodically and repays principal only at the end.
Bullet Loan is one product that uses bullet repayment. The repayment pattern itself can also describe bonds and other debt structures.
An interest-only phase may later convert into amortization. Bullet repayment means the principal is still expected in one large maturity payment unless the contract says otherwise.
Bullet Loan: A lending product built around this repayment form.
Bullet Bond: A bond instrument that repays principal at maturity.
Amortizing Loan: A loan that gradually pays down principal.
Balloon Payment: A large final payment that may resemble, but does not always equal, a pure bullet structure.
Interest-Only Loan: Can coexist with, or transition into, a large maturity payment.