What characterizes Balloon Indebtedness?

Balloon indebtedness is characterized by the structure where the repayment of principal is delayed until the end of the term, often resulting in a large lump-sum payment due at that time. This repayment strategy typically involves smaller or no principal payments during the life of the loan, making the final payment significantly larger. The concept fits well with the definition of balloon indebtedness, particularly the aspect of "delayed principal payments."

The other choices describe different structures of debt. Immediate full principal payments are indicative of a different type of loan, typically seen in amortizing loans rather than balloon loans. The option pertaining to no interest payments misrepresents the fundamental nature of most debt arrangements, which generally include interest. Lastly, the option advocating for debt that is interest-only describes another specific kind of loan but does not capture the unique feature of balloon indebtedness, which specifically focuses on the delayed principal aspect.