A residual payment or balloon payment is a portion of the vehicles cost price that you need to repay
at the end of the finance term. It is often around 35% of the capital. Car dealers offer residuals so that
the monthly repayment on new cars are lower. At the end of the finance term, when this amount is due, you
can either settle this amount in cash or some institutions will offer you a repayment plan. The interest of
this amount forms part of your monthly repayments, and should you wish to refinance your agreement, you
will pay double interest on this amount.