Definition
A lump sum is a single payment of a full amount at once, rather than spread over time. In lending, it can describe how a loan is funded or repaid.
A lump sum is one complete payment made at a single time instead of in installments. In lending, the term can describe funding, when you receive the entire loan amount up front, or repayment, when a balance must be cleared in one payment. A payday loan is commonly structured as a lump-sum repayment due on a set date, and a balloon payment is a lump sum due at the end of an otherwise installment loan. By contrast, an installment loan replaces a single repayment with a series of smaller scheduled payments over the term.
