Balloon Payment Calculator
Work out the payments on a balloon loan. The monthly payment is sized as if the loan amortized over the full term, but a large lump sum comes due when the balloon date arrives.
How to use the balloon payment calculator
- Enter the loan amount and the annual interest rate.
- Set the amortization term in months (this sizes the monthly payment).
- Set the balloon term, then read the monthly payment and the balloon due.
Examples
300k at 5%, amortized over 30 years, balloon at 5 years
Amount 300,000, rate 5%, amortization 360 months, balloon 60 months
Monthly payment 1,610.46, balloon due about 275,486
Frequently asked questions
What is a balloon payment?
A balloon payment is a large lump sum due at the end of a balloon loan. The monthly payments are kept low by amortizing over a long term, but the loan is not fully paid off, so the remaining balance is owed all at once.
How is the balloon amount calculated?
The monthly payment is computed as if the loan amortized over the full amortization term. The tool then amortizes that payment forward to the balloon date; whatever balance remains at that point is the balloon payment.
Why use a balloon loan?
Balloon loans offer lower monthly payments than a fully amortizing loan of the same term. They suit borrowers who expect to sell, refinance or come into funds before the balloon comes due.
What happens when the balloon is due?
You must pay the remaining balance in full. Borrowers typically refinance into a new loan, sell the asset, or pay cash. If none of those is possible, the loan can go into default, so plan ahead.
Are the results financial advice?
No. These figures are estimates for comparison. Confirm the exact payment, balloon amount, fees and refinancing terms with your lender before you commit to a balloon loan.
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