What Is a “Bullet Loan” in the Context of DeFi Lending?

A bullet loan, in both traditional and DeFi finance, is a loan where the borrower repays the entire principal amount (the "bullet") in one lump sum at the end of the loan term. Only the interest payments are typically made during the life of the loan.

In NFT lending, this structure is common for fixed-term, peer-to-peer loans, requiring the borrower to ensure they have the full principal available for repayment.