Balloon Loan Calculator
Calculate the monthly payment and the lump sum due at the end of a balloon mortgage or business loan
Loan Details
The schedule payments are based on
When the remaining balance is due
Balloon payment due after 7 years
$182,294.83
After 84 monthly payments of $1,330.60, 91.1% of the loan is still owed
Monthly payment
$1,330.60
as if paid over 30 years
Balloon payment
$182,295
due with payment 84
Interest paid
$94,066
before the balloon
Total paid
$294,066
monthly payments plus the balloon
Loan balance until the balloon
Payments follow a 30-year schedule
Where your money goes
Everything you pay, including the balloon
Year-by-Year Schedule
| Year | Payments | Interest | Principal | Balance |
|---|---|---|---|---|
| 1 | $15,967 | $13,936 | $2,032 | $197,968 |
| 2 | $15,967 | $13,789 | $2,178 | $195,790 |
| 3 | $15,967 | $13,631 | $2,336 | $193,454 |
| 4 | $15,967 | $13,462 | $2,505 | $190,949 |
| 5 | $15,967 | $13,281 | $2,686 | $188,263 |
| 6 | $15,967 | $13,087 | $2,880 | $185,383 |
| 7 | $15,967 | $12,879 | $3,088 | $182,295 |
The final balance of $182,294.83 is due as the balloon payment.
What Is a Balloon Loan?
A balloon loan has payments calculated as if the loan ran for a long time, often 30 years, but the loan comes due much sooner, commonly after 5 to 7 years. The rest of the balance is paid in one large balloon payment. Balloon loans are common for commercial property, business loans and some car and home loans; most borrowers plan to sell or refinance before the balloon is due.
The Formulas
Payment = L × r ÷ (1 − (1 + r)^−n), n = amortization months
Balloon = balance after the balloon month
Interest-only payment = L × r
L is the loan amount and r the monthly rate (annual rate ÷ 12).
Before You Sign
- •Have a plan for the balloon: savings, a sale or a refinance
- •Refinancing depends on future rates and your credit at that time
- •Ask whether the lender offers a reset or extension option
- •Compare the total cost with a fully amortizing loan
- •Check for prepayment penalties if you might pay early