Accurate Balloon Payment Calculator
Balloon loan - a whimsical name don't you think for a potentially risky financial product?
What is a balloon loan?
Balloon payment calculator solves for the periodic payment amount or final balloon payment amount. Create schedules with dates. Supports extra payments.
- Solves for 5 unknowns.
- Supports extra payments and user selectable dates.
- Creates a printable payment schedule.
- Now export to XLSX/DOCX files.
You can structure a loan to meet your specific needs.
A balloon loan has its regular, periodic payment calculated using one term (say 30 years) when the last payment is due sooner (say in 7 years).
Wikipedia defines a balloon loan or mortgage as a loan:
which does not fully amortize over the term of the note, thus leaving a balance due at maturity. The final payment is called a balloon payment because of its large size.
This Balloon Loan Calculator will not only calculate the final balloon payment, it will also help you structure a loan to meet your exact needs.
Check out these additional loan scenarios:
- Want to know what periodic payment will result in a specific final balloon amount? This calculator will calculate the regular payment.
- Or do you need to set the regular payment to an agreed upon, but nontraditional amount before calculating the balloon? This calculator is capable of doing that calculation as well.
- Or do you have a budget for both the periodic payment and the balloon payment and you want to know how much you can borrow? This calculator can use your inputs to calculate the loan amount.
- Or do you want to lower the periodic payment even further? Then select interest-only payments.
- Or do you want to calculate the periodic payment using say a 30-year term while the balloon is computed using a 7-year term? Yup, you can do that calculation too. See "Doing the Two-Step" below
Information
Recent changes and enhancements — Dec. 2023
- Export schedule data to Excel/xlsx file. Click on "Payment Schedules" then "Continue" or "Skip" past the title page.
- Save schedules to Word/docx file. Saving to a .docx gives you the opportunity to alter the style of the schedule, to add notes, or incorporate the schedule into a report.
Using the Balloon Loan Calculator
To Quickly
Pick a Date
As mentioned, a balloon loan is a loan that has its regular periodic payment calculated using one term (say 30 years) when the last payment is due sooner (say in 7 years).
If you do not know the amount of the regular loan payment, then we must calculate it before we can calculate the final balloon amount.
Example: Assume you are considering a mortgage for $146,500. You want the monthly payment calculated based on a 30-year loan, but you'll pay the balance after 72 months.
Doing the Two-Step
Step 1: Enter:
| Amount of Loan?: | $145,500.00 |
| Annual Rate?: | 4.5000% |
| Balloon Due at Payment? (#): | 360 |
| Periodic Payment?: | $0.00 |
| Final/Balloon Payment (can be 0)?: | $0.00 |
When you enter "0" for both "Periodic Payment" and "Final/Balloon Payment," you are setting up the calculator to calculate a level payment for the entire term of the loan. That is the final payment will not be a balloon payment.
Click "Calc" and here are the results. $737 is the "regular" payment amount for a 30-year loan. (The final payment gets rounded by less than $2.00 or less than $0.01 per each regular payment.)
| Periodic Payment?: | $737.23 |
| Final/Balloon Payment (can be 0)?: | $735.27 |
Step 2: Now to calculate the balloon payment amount, with the balloon due after six years, set the calculator as follows:
| Amount of Loan?: | $145,500.00 |
| Annual Rate?: | 4.5000% |
| Balloon Due at Payment? (#): | 72 |
| Periodic Payment?: | $737.23 |
| Final/Balloon Payment (can be 0)?: | $0.00 |
Click "Calc," and this is the balloon that will be due in the final month of the sixth year if the debtor makes payments based on an assumed term of 30 years:
| Final/Balloon Payment (can be 0)?: | $130,433.50 |
If that's what you wanted to know - what the balloon payment amount will be for a loan, then you're finished.
But with this calculator, it's possible to do more. You can structure a loan, just the way you want it.
Other scenarios - very flexible!
Example 2: Pick the balloon payment amount and calculate the periodic payment:
| Amount of Loan?: | $145,500.00 |
| Annual Rate?: | 4.5000% |
| Balloon Due at Payment? (#): | 72 |
| Periodic Payment?: | $0.00 |
| Final/Balloon Payment (can be 0)?: | $100,000.00 |
| Result: | |
| Periodic Payment?: | $1,110.73 |
Example 3: Pick any periodic payment amount:
| Amount of Loan?: | $145,500.00 |
| Annual Rate?: | 4.5000% |
| Balloon Due at Payment? (#): | 72 |
| Periodic Payment?: | $2,000.00 |
| Final/Balloon Payment (can be 0)?: | $0.00 |
| Result: | |
| Final/Balloon Payment (can be 0)?: | $27,541.94 |
Example 4: Pick your payments and see what you can borrow:
| Amount of Loan?: | $0.00 |
| Annual Rate?: | 4.5000% |
| Balloon Due at Payment? (#): | 72 |
| Periodic Payment?: | $1,000.00 |
| Final/Balloon Payment (can be 0)?: | $50,000.00 |
| Result: | |
| Amount of Loan?: | $84,794.97 |
A Balloon Loan with Extra Payments
The calculator's support for extra payment is very flexible. First, you'll notice the calculator prompts you for "Extra Payments Start?" date. You can, therefore, schedule extra payments between the regular due dates if doing so is better for your cash flow.
As mentioned elsewhere, the calculator allows for a one-time extra payment or for multiple extra payments. The multiple extra payments can be for 2 or any number up until the loan is paid-in-full. (In that case, set the number of extra payments to "Unknown.")
When the extra payments are "off-schedule," the calculator prepares an expanded report, showing the payment being applied 100% to the principal with interest accruing.
Note how the interest-only payment drops from $545 to $526 after the extra payment.
This is the correct way to apply the payment - something that other online calculators don't usually handle properly. That is if they even let you plan for extra payments between regular payments.
The Interest-Only Payment Method is a Special Case
Most frequently, the periodic payments get allocated to both principal and interest. Thus with each payment, the loan balance is being reduced.
But what if the borrower wants to pay even less per period?
If that's the case, the lender may agree to make the balloon loan one where the borrower pays only the interest due on each payment date. Paying only the interest each period reduces the payment amount even more for the borrower.
This calculator supports interest-only payments (select the option under "Amortization Method"). If you select it, however, the calculator works slightly differently.
- First, the balloon payment will always be equal to the loan amount. Therefore, it isn't possible to solve for the balloon payment.
- Or looked at in a different way, the user cannot provide a periodic payment amount. The calculator will always calculate the regular payment amount since it is the interest due.
- When introducing extra payments into the interest-only cash flow, the calculator's main window shows the amount of the first interest-only payment. But after each prepaid principal amount, the subsequent payments will be reduced since prepaying lowers the loan balance which, of course, reduces the interest due.
Given the above, if you select interest-only, in almost all cases, to use the calculator, you'll want to set both of these inputs to 0.
| Periodic Payment?: | $0.00 |
| Final/Balloon Payment (can be 0)?: | $0.00 |
Charts
As the day winds down, I go cross-eyed looking at columns of numbers. That's where cash flow charts come in handy. You can quickly learn the relationship between the principal, interest and optional extra payments.
This calculator creates 3 charts.
- The annual chart compares total interest and principal paid each year.
- The accumulated chart shows the amounts allocated to the principal and interest since the start of the loan.
- The pie chart clearly shows the relationship between total interest and principal with calculated percentages.
Bloggers, feel free to use these charts to make your point. Click for several export options.
Should I take out a balloon loan? There's Risk!
Balloon loans have their advantages. The borrower gets to borrow a large amount, for a short period, while making relatively small periodic payments.
However, the borrower should only consider this loan type if they are confident that they'll have the funds available or that they'll be able to refinance the loan in time to make the balloon payment when it comes due. Otherwise, the borrower will most certainly default on the terms of the loan, and they risk ruining their credit rating.
What do you think? Is a balloon loan a useful financial product? Or are you an issuer of these loans? If so, do you have anything to add to the above?
You can leave your comments and questions below.
Balloon Loan Calculation Help
You can calculate one of any five possible unknowns with this calculator. Just enter a zero for one of the following: "amount of loan," "annual rate," "balloon due at payment number," "periodic payment" or "final/balloon payment."
Therefore, it is easy to solve for a periodic payment amount that will result in a particular balloon payment. Or you can solve for the balloon payment amount given a regular payment amount that you provide.
If you are solving for the balloon payment, and the periodic payment decreases as well, that indicates the periodic payment was larger than necessary given the other loan details.
Take this extreme example:
What if the loan amount is $100,000 and the balloon is due at period 48, and the periodic payment is $10,000? There no need for a 48th payment, much less a balloon payment. In this case, the loan would be paid off in 10 periods (not accounting for interest).
The calculator handles this scenario by recalculating and lowering the regular payment.
If you enter non-zero values for all five inputs, the calculator will recalculate the balloon amount provided.
NOTE: A balloon payment is NOT the remaining balance of a loan. See "Remaining Balance Calculator" if you need to calculate the loan balance after making a payment.
Chris says:
I am trying to use the balloon payment schedule and to print it out. When I push ” print ” nothing happens. I am using an iPad with Hammermill print over wifi.
Thanks
Karl says:
I’m sorry you are having problems printing. However, I just confirmed that I can print from Google Chrome on a desktop as well as from Safari using my iPhone X. So I don’t think there is anything wrong on my side, though there may be a specific problem with iPads that I don’t know about.
Can you print from another application? If not, perhaps the iPad needs to be rebooted?
jennifer says:
Hello – thank you for this calculator it is very helpful. Can you tell me how i could possibly add another extra payment? I originally paid an extra 1,000 per month towards principal for 6 months and then i changed that to 2,000 extra towards principal.
Karl says:
You’re welcome.
You can’t do that with the balloon calculator, but you can do that with the Ultimate Financial Calculator.
When you go to the page, scroll down to the tutorials. There a couple about balloon payments and extra payments. (I would start with tutorial #1 to get an overview.)
Basically, the UFC will allow users to do anything because you have complete control over interest rates, payment dates, and amounts.
Christine says:
Karl, your calculators have been enlessly useful to me. I am just paying off the baloon loan I modeled with your tools over 5 years ago.
I wanted to take a moment to thank you for making them available.
Chris
Karl says:
Thank you, Chris, for letting me know. And congratulations on getting that loan paid off! Now perhaps it’s time to plan for retirement? 🙂
Bessann says:
I need to calculate a loan with all interest due at the end of the term…no monthly payment.
Amount = $50,000
Interest Rate = 6%
Compounding = Monthly
Term = 5 years
Thank you….
Karl says:
Just to make sure I understand, are you saying there will only be one payment?
If so, I would use this loan calculator and set the loan date and the first payment date and number of period to 1.
If I misunderstood, let me know. I’m sure there’s a calculator here somewhere that will do what you need. 🙂
Adriana says:
Hi
For what I gathered you seemed to be very helpful.
I need help calculating a loan from a Monthly Payment standpoint, and see how the amortized schedule looks like.
For Example:
Monthly Amount Payment (this is the amount I want the payment to be) $500
Loan Amount $ 50,000
Interest Rate (amortized): 6%.
Loan Term: 20 Yrs
Also, how would it work if I were to add a a ballon payment at year 7.
Thank you :):)
Karl says:
Hello. Thanks for stopping by.
Neither should be a problem. Since you were on the balloon calculator, let’s look at how to do the balloon loan first.
Fill in the calculator this way:
Amount of Loan?: $50,000.00
Annual Rate?: 6.0000%
Balloon Due at Payment? (#): 84
Periodic Payment?: $500.00
Final/Balloon Payment (can be 0)?: $0.00
By entering a 0 for the final payment, you you are telling the calculator to solve for a balloon amount (at the end of year 7). If you meant at the beginning of year 7, just change the 84 to the period number you want the balloon due.
For the loan amortization schedule without a balloon, you’ll need to use this loan calculator (if you try to use the balloon calculator for the normal loan [without balloon], you’ll get a too many unknown error).
Enter the values this way:
Loan Amount?: $50,000.00
Number of Payments? (#): 0
Annual Interest Rate?: 6.0000%
Payment Amount?: $500.00
Now I know you said the term is 20 years, or 240 months, but here’s the thing. If you want to pay $500/month, then the loan will be paid off way before you reach 20 years. So I’ve indicate entering 0 for "Number of Payments" so the calculator can calculate the term.
You could enter 240 months and leave the payment amount at $500, but the what will happen is, the loan will be paid off, and the 500 a month will keep on reducing the balance below 0, and then at the 240 period, the lender will how the borrower a big refund. This is accurate, but probably not what you want :-).
If you want to see what the payment would be and have a 20 year term, enter 240 for the number of payments and 0 for the payment amount.
If you try this, I would be interested in hearing how you make out. If something not clear, please ask again.
JP DZahr says:
Hi Calculator Guru,
Are you available for hire? I need a spreadsheet to Calculate Balloon payments. I need it to show a 30 yr mortgage with a normal schedule then show a client how the payments and principals change if we add a Balloon payment in for 5 years or 10 years at the end of each of those years. I should be able to show an accelerated payment schedule where the loan is paid off in 10-12 years rather than the 30 years it started with. The balloon payment would be the same payment in all end of each year for 10 years. Is this something you can create for us? It could be called the Balloon accelerated payment schedule. Thank You JP
Karl says:
Hello, of course I can create it! 🙂 The only thing is, this calculator meets all of your stated requirements. Why do you need a spreadsheet? (I just hate taking people’s money for no reason.) If you’re not sure how to do one of the calculations, just ask and give me some specific numbers you would like to see used. I’ll walk you through the steps.
JP DZahr says:
Hi Karl,
Thanks for the quick reply. WOW that’s Great news! I tried the calculator on this page but perhaps I’m just not knowledgeable enough to perform the calculation properly. Here’s the numbers I’m looking for. I need two versions of a mortgage to show clients. One is easy, a 30 year mortgage at 8.5% for a $200M mortgage, I have this one already. The second is the accelerated mortgage with a balloon payment towards the principle every “end of a the year” a balloon payment is made of $18M for the first 10 year period, so 10 of these payments over 10 years. I need to show what the new principle or remaining balance is each year, and what the ramifications are towards an early payoff if the monthly payment is fixed at the original monthly payment of $1,537,826.97. I think the loan could be paid off in 10-12 years rather than a 30 year period. No penalties or fees are added to the early payoff or balloon payments. I hope this makes sense. Thank you JP
JP DZahr says:
Hi Karl, I retried the calculator and don’t get me wrong I love it. I just need to be clear there are 2 kind of payments the monthly mortgage at $1,537,826.97 and an additional $18M annually for up to 10 years. In your calculator I wasn’t able to configure it for both payments it seems to only give me the Balloon payments after reviewing the schedule sheet. So what was missing is the monthly mortgage needs to be added into the schedule. With just the Balloon payments the accelerated payments go to 8 years which is Great. However, now if we add the monthly into the formula which I don’t know how to do that in your calculator, then this monthly payment should change the pay off to perhaps 5-6 years max. What do you think can we do it in your calculator if not I’m still open to an Excel spreadsheet version and you fee for doing it. THANKS again. JP
Karl says:
Hi JP, yes, it can be done. But lets start with basics and so we don’t confuse each other, lets define some terms. Also, let’s not try to guess an answer – lets just get it calculated. As I understand it, you’ve been able to create the "normal" amortization schedule with this calculator the runs the full 30 years. Correct. Then the next thing I suggest is let’s work on adding the extra payments. Extra payments and a balloon payment are different things. From the point of view of this site, a loan may or may not have a balloon payment, but it it has a balloon payment, there will only be one. A balloon payment is the final payment and it is larger than the "normal", periodic payment.
I’m not clear on what you mean by "the monthly mortgage needs to be added into the schedule." If you have a schedule, then you have the monthly mortgage payment, right?
If you want an annual extra payment of $18 million made at the end of each year then click on the "Set Dates or Extra Payments" and set the below options:
Extra Payment Amount?: $18,000,000.00
Extra Payments Start?: 12/31/2019
Extra Payment Frequency?: Annually
Number of Extra Pmts? (#): Unknown
You’ll make the above settings after you have the amortization schedule for the standard 30 year mortgage. The "Unknown" means the extra payments will be paid until the loan is paid off. Now you can compare the schedule to the 30 year.
If you get this far, then we can talk a balloon payment too, if you want one.
jp dzahr says:
Hi Karl, I just sent you an email with screen grabs and a pdf from your calculator showing the correct results, but I need a little extra for custom monthly payments let me know your thoughts. Emailing me is fine. Thanks JP
Karl says:
Hi JP, I saw your email. I understand that the extra payments will vary in amount. That’s still not a problem. You don’t need custom programming for that. Please see the Ultimate Financial Calculator on this site. It allows user to make payments or extra payments on any date, for any amount. If you try it, scroll down the page to the tutorials. There are 25 of them. Look at #1 for an overview and then there are 2 dealing with extra payment specifically.
Murat Can says:
Hello, i need to learn how ballon payment works. My boss gave me search job about this project. I need to make an algoritm about this. Will you help me please 🙂
Karl says:
If you want to know how to use the calculator, I’ll answer those questions. I do not get involved with answering questions about the equations however – that’s much too involved.
Patricia Arteaga says:
Hello,
Bank of America approved us in 2014 for a long modification with a $100,000 balloon payment. Since then, they sold the mortgage to Carrington Financial. When I ask for a payoff amount since we are selling our home, there is no information on the 100K. What happened to it? I called BoA and they won’t give me the information since I am not their client any longer. Carrington tried to explain things but I just heard the word “amortization” and that I would only owe $1,000 after I pay off the loan. What??
Thanks.
Karl says:
Is the loan payoff amount more than $100,000? If so, then that’s where the balloon is.
I can’t really say much here because I don’t know the details, and details are always important.
However, if you want to confirm the exact loan payoff amount you’re being told, and you have your complete payment history, then you can check the calculation using this loan payoff calculator.
Whether or not there is a balloon payment isn’t the issue to me. The issue is, is the payoff amount correct. Determining that is basically taking the loan amount, setting the interest rate and deducting the payments made as of the particular date paid and calculating the balance. Something a loan payoff calculator will do for you.
Marcellino says:
$500,000 loan 7.00% simple interest with no balloon but large periodic payments
I have a customer that want to pay interest only for the first 12 months then at 18 months and every 6 months after a $43,000 payment.
can I use this calculator
Karl says:
The calculator that you need to use is the Ultimate Financial Calculator.
Scroll down the page to the tutorials. Check out tutorial #1 for an overview, and the one about interest only payments.
If you have any questions, please ask. As I understand it, the calculator will definitely do what you need.
Megan says:
Hello,
How do I calculate APR on a partially amortizing loan with discount points and origination fees on a financial calculator? I have a TI BAII Plus, and I’m calculating a problem for class but I’ve run into some trouble that’s confusing me a lot.
The loan amount is $3,000,000 with an annual interest rate of 3.75%, $30,000 in origination fees, and 1.3 discount points. The payments are monthly and calculated for a 30 year term, but the loan is actually paid off after 10 years. This is how I calculated the payment:
PV=-3,000,000
N=360
I/Y=3.75/12 (Payments per Year is set to 1)
CPT PMT= 13,893.47
At first, I calculated the APR this way:
PV=2,931,000 (calculated by subtracting origination fees of $30,000 and discount points equaling $39,000 from loan amount)
N=120
PMT= -13,893.47
CPT I/Y (*12)=-10.27%
The negative APR is what confused me, so then I tried it this way:
PV=2,931,000
N=360
PMT=-13,893.47
CPT I/Y (*12)=3.94%
Are either of these methods correct or am I completely messing up somewhere else in the problem?
Thank you in advance!
Karl says:
First, for APR calculations, you should use the APR calculator on this site.
When calculating an APR, you only need to enter the actual cash flows. Please try it, and then if you have questions, feel free to ask them.