Definition - What does Down Payment mean?
A down payment is a lump sum amount of money paid by the buyer of property like a piece of real estate, car, or any other material thing. This is usually a small percentage of the total worth of the asset with the remaining to be paid in monthly or quarterly installments.
Justipedia explains Down Payment
The purpose of the down payment is to secure some of the capital of the lending institution especially when the buyer is unable to pay the monthly installments or goes bankrupt. Also, if the buyer or the borrower fails to pay the installment, the lender is legally entitles to keep the down payment.
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