Which of the following terms can be used to describe a balloon loan?

A balloon loan is characterized primarily as a partially amortizing loan. This means that during the term of the loan, the borrower makes payments that do not completely pay down the principal. At the end of the loan term, a large final payment, often referred to as a "balloon payment," is required to pay off the remaining amount of principal. This structure typically results in lower monthly payments during the loan term, followed by a significant lump sum payment.

In contrast, a fully amortizing loan ensures that the borrower makes payments throughout the loan term that cover both interest and principal, resulting in the loan being paid off completely by the end of the term without a large final payment. A negatively amortizing loan involves payments that are lower than the interest accrued, leading to an increase in the loan balance over time which is different from the structure of a balloon loan. An adjustable-rate mortgage (ARM) can have various features, but it does not inherently define the structure of repayment seen in a balloon loan. Thus, the most accurate term to describe a balloon loan is that it is a partially amortizing loan, confirming the choice as appropriate.