Applications will internally store the password bits you've already typed. Some of them might do so in ways that allow an attacker to retrieve them. For instance, we discussed in a previous questionin a previous question how passwords typed into Internet Explorer could be printed into the IE console by a user.
Besides that, there's the risk of having someone guess the missing characters (as pointed out by @MarkBuffalo) since many passwords tend to end with special symbols or numbers (very specifically, many passwords end with "1"). If you've been observed before, or an attacker has prior knowledge of a password of yours, they could succeed in completing your partially typed password.