Balloon Payment Calculator
Payments are based on a long schedule, but the remaining balance is due earlier.
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Balloon Payment Calculator by TheCalcTools
How the Balloon Payment Calculator works
Enter the loan, rate, the amortization period used to set the payment and the actual term.
The monthly payment is calculated as if the loan ran for the full amortization period.
At the end of the term the unpaid balance is due in one payment.
The formula
Worked example
Using the default values shown in the calculator:
| Loan amount | $200000 |
|---|---|
| Interest rate (APR %) | 6.5 % |
| Amortization schedule (years) | 30 |
| Balloon due after (years) | 7 |
- Payment on a 30-year schedule = $1,264.14 a month.
- After 7 years, you have paid $106,187 but still owe $180,832.
Result:
| Monthly payment | $1,264.14 |
|---|---|
| Balloon payment due | $180,832 |
| Total payments before balloon | $106,187 |
| Interest paid before balloon | $87,020 |
Frequently asked questions
How is a balloon loan repaid?
Borrowers usually refinance, sell the asset or pay from savings when the balloon is due. If none of these is possible, they risk default.
Why choose a balloon loan?
It gives lower monthly payments than a short fully amortizing loan, which can suit someone who plans to sell or refinance before it comes due.
Sources and further reading
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This calculator gives estimates for information only. It is not financial advice, and your lender's or provider's figures will govern. Rates, fees and rules vary. See our disclaimer.