Which type of loan allows for only interest payments until the final payment is due?

A bullet-structured loan is designed specifically for scenarios where the borrower only pays interest during the life of the loan, with the entire principal amount due at the end of the term. This structure can be beneficial for borrowers who may not have sufficient cash flow to make principal payments initially, allowing them to manage expenses more effectively until they are better positioned to either refinance or pay off the principal in one lump sum at maturity.

The nature of bullet loans allows for flexibility in financial planning, as borrowers can allocate resources towards other expenses or investments while only servicing the interest. This structure is especially common in certain types of corporate financing and large capital projects, where cash flows may fluctuate during the loan term. The term "bullet" refers to the way the principal repayment occurs in a single "bullet" payment at the end of the loan, rather than being amortized over the term.

In contrast, self-amortizing loans require both principal and interest payments throughout the life of the loan, while debentured and secured loans refer to specific types of loans characterized by the backing or collateralization and do not specifically indicate the payment structure of interest-only versus principal payment.