Balloon loans keep payments low, which is common in commercial real estate and some car loans, but you must repay, refinance or sell when the balloon comes due. If rates rise or values fall, refinancing can be hard.
How to use the Balloon Payment Calculator
- Loan amount
- Interest rate
- Compounding frequency
- Amortization period
- Balloon due after
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter the loan amount, interest rate, compounding, the amortization period and when the balloon is due.
Tips
- Compare loans by APR and total cost, not just the monthly payment.
- Extra payments go straight to principal and can save a lot of interest.
- Pay off the highest-rate debt first if you want to save the most money.
- Check for prepayment penalties before paying a loan off early.
Common mistakes to avoid
- Stretching a loan term to lower the payment without seeing the extra interest.
- Paying only the minimum on credit cards.
- Forgetting fees that are rolled into the loan.
Inputs explained
| Field | What to enter |
|---|---|
| Loan amount | Amount in your currency |
| Interest rate | In % |
| Compounding frequency | Choose one: Yearly, Semi-annually, Quarterly, Monthly … |
| Amortization period | In years |
| Balloon due after | In years |
What each result means
- Monthly payment = pmt([Monthly rate], [Amortization period]×12, [Loan amount])
- Balloon payment = max([Balloon payment]([Loan amount], [Monthly rate], [Amortization period]×12, [Balloon due after]×12), 0)
- Total of payments (incl. balloon) = [Monthly payment]×[Balloon due after]×12 + [Balloon payment]
- Total interest = [Total of payments (incl. balloon)] – [Loan amount]
- Balloon as a share of the loan = [Balloon payment]÷[Loan amount]×100
Example values
How the main result changes when Loan amount changes and everything else stays at the example values above:
| Loan amount | Balloon payment |
|---|---|
| 250,000 | 226,040.61 |
| 375,000 | 339,060.92 |
| 500,000 | 452,081.22 |
| 625,000 | 565,101.53 |
| 750,000 | 678,121.84 |
| 1,000,000 | 904,162.45 |
Formula
Payment = pmt(i, amortization months, loan)Balloon = loan balance after the balloon term = L(1 + i)^k − payment × ((1 + i)^k − 1) ÷ iTotal paid = payment × k + balloonWorked example
Inputs — Loan amount: $500,000; Interest rate: 6.5 %; Compounding frequency: Monthly; Amortization period: 30 years; Balloon due after: 7 years.
Results — Monthly payment = $3,160.34; Balloon payment = $452,081.22; Total of payments (incl. balloon) = $717,549.79; Total interest = $217,549.79; Balloon as a share of the loan = 90.42 %.
Frequently asked questions
What is a balloon payment?
A large lump sum due at the end of a loan whose regular payments don't fully repay it.
Why choose a balloon loan?
Lower payments – useful if you'll sell or refinance before it's due.
What happens if I can't pay the balloon?
You'd need to refinance or sell; otherwise you risk default.
What formula does the Balloon Payment Calculator use?
Payment = pmt(i, amortization months, loan).