Which type of swap generally requires a lower initial payment from the payer?

A zero-coupon swap generally requires a lower initial payment from the payer because it has no periodic interest payments. In a traditional swap, cash flows are exchanged periodically, which means that the payer typically needs to make regular outflows. However, in a zero-coupon swap, the payments on the swap are deferred until the end of the term. This structure means that the upfront cash flow commitments are lower for the payer because they are not making intermediate interest payments throughout the swap's life. Instead, they pay a single, lump-sum amount at maturity. This characteristic makes zero-coupon swaps appealing to those looking to manage cash flow more effectively, as less capital is required initially compared to other types of swaps that demand regular payments.