# Accurate Balloon Payment Calculator

Balloon loan - a whimsical name don't you think for a potentially risky financial product?

What is a balloon loan?

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

- Sept. 2023 - fixed issue where balloon schedule could have had one more extra payment when user sets "Number of Extra Payments" to "Unknown."
- When applicable, "Number of Extra Payments" is now assigned a value after calculation if user had set it to "Unknown."

## 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 |

## Balloon Amortization Schedule 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 amortization schedule, showing the payment being applied 100% to the principal with interest accruing.

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.

## Shawna says:

When using the balloon payment calculator, how do I get rid of the rounding? We received a payment schedule from someone and it says at the bottom “No rounding adjustment necessary” mine keeps showing a “last payment decreased by ….. due to rounding?

## Karl says:

The rounding is a byproduct of the payments made. If there wasn’t a rounding adjustment, then the loan would be over or under paid that is, the final balance would be slightly negative or positive.

If you have a schedule that says no rounding is necessary, and this calculator creates a schedule that indicates rounding is necessary, then you need to compare the two schedules themselves and see where the difference is. First, I assume the payments are paid on the same dates. If they are, then I would suggest checking the interest amounts. If the interest amount differ, then that’s either good or bad for the borrower, depending on with the interest is higher or lower.

Anyway, the point is, you need to understand the root cause for the difference in the rounding. Then we can see what change can be made so the two schedule match (if that’s what you want).

## Nancy says:

I have an amortization schedule printed out for a carry back we are doing.

Loan amount: $240,000

Annual Interest rate: 6%

Amortization period: 20 years

# of regular payments: 71

Begin date: 6/27/2019. First payment 7/27/2019

Monthly payment: $1719.43

Balloon payment: $196,835.17

Balloon payment w/rounding: $196,836.04

On March 24, 2020, we received an email that with the March payment and all payments from now on they are adding $600.00 to the principle each month. They expressed a desire from the start that they would probably pay the loan off early also.(We have a no pre-payment penalty clause.)

I not sure how to calculate the new balloon payment.

Thank you in advance for any help with this.

## Karl says:

If you want to use this calculator, then take the balance after the Feb. 27 payment and start a new loan with the new payment amount, and proceed to calculate the new balloon based on the number of remaining payments.

If you want to show a complete, single schedule, with the payment change, then use this calculator. Scroll down the page to the tutorials. If you have any questions, of course, feel free to ask them.

## TONY says:

Love the Calculator however am having difficulty working through an example where the Loan amount is drawn on the 1st May 2020 with the first Payment made 3 months later on the 1st August 2020 – looking to work out Payment amount, per month on a Profile of 84 fixed Payments to a predetermined balloon amount, with the Balloon due as an 85th Payment . . . . . The Calculator is showing me an accumulated Interest amount for the period 1st May to 1st June BUT ALSO suggesting I’ve made a Payment to cover this specifically in addition to my fixed monthly Payment. Appreciate your help /assistance on this.

## Karl says:

Sure, I’m happy to try. But, you write, "The Calculator is showing me an accumulated Interest amount for the period 1st May to 1st June BUT ALSO suggesting I’ve made a Payment to cover this specifically in addition to my fixed monthly Payment." However, you didn’t tell me what you need. The interest calculation is accurate, but there are options for how it’s paid. Did you see this setting? "Long Period Options?:"

## Tony says:

Hi Karl, so effectively I want to understand how I work the Calculator to solve the following – Borrowing £65,000 on 1st May, I want to commence Capital & Interest Payments on 1st August [so effectively rolling up Interest for this period] and paydown to a Balloon of £15,000 in 84 equal Payments with the Balloon being the 85th Payment – Want the Calculator to show me the relevant Monthly Rental off a rate of 4.5% . . . . . . How to do this is important to me.

Thank you.

## Karl says:

Ok, on this side of the pond, we use slightly different terminology, but I think I got you. 🙂

You’ll set up the calculator this way:

And on the dates tab

Leave other settings as they are (unless you have a reason to change them)

except:If you use the above, you’ll be asking the calculator to calculate the monthly payment that will require a $15,000 (with a few cents rounding) payment at period 85 to pay off the initial principal balance of $65,000.

The long interest period, when set to amortized, tells the calculator to include the initial long period interest in the regular monthly payments.

As a check, I get a monthly payment of $758.62. The final balloon will be $14,999.59.

Close enough?

## Tony says:

Brilliant Karl – works perfectly – thank you from a fan in Ireland.

## Karl says:

You’re welcome! Thanks for letting me know.

## Karl says:

I’ll add, if you want to read more details about the various interest settings, you may see all about loan amortization. Scroll down, and these settings are discussed.

## Lisa Stewart says:

I need to be able to amortize our clients’ loans, for instance, for a note with a 10-year term, but amortized over 20 years. Will I be able to do this with the balloon amortizer? It would certainly seem like I could based on the name of the calculator.

Also, sometimes, the client gives me the monthly payment on a specific loan amount and wants me to tell them how long it would take to pay the loan off based on that fixed monthly payment. Will I be able to do that? Thank you for your assistance before I go ahead and purchase this calculator.

## Karl says:

Yes, this balloon calculator will do what you need – a loan with a 10-year term but based on a 20-year payment.

For the step-by-steps scroll down the page to the first example with the heading : "

Doing the Two-Step"For your second question, when the client specifies the amount, the calculator will do that too. Please see "

Example 3: Pick any periodic payment amount".## Lisa Stewart says:

Does the balloon calculator calculate APR (it probably states that somewhere in your website but I hope you do not mind if I just ask)? Also (probably answered on the website) when downloaded/purchased, will I receive full instructions on all of its features?

## Karl says:

The balloon calculator does not calculate the APR.

However, all is not lost. Please see this calculator. It will do balloon calculations as well as calculate the APR.

If you try it out, you’ll find that it’s a lot more flexible. Scroll down the page to the tutorials. There are 2 about balloon payment loans.

You also have another option. Continue to use this balloon payment calculator and calculate the APR using this APR calculator. It will create a complete Regulation Z disclosure statement if you need it.

## Lisa Stewart says:

I was going to try out the recommended calculator using the “tutorial” option but my office computer setup would not let me go very far before it stopped me and said the site was not secure. I could go no further. Is this not a calculator that I am going to be able to use after all?

## Karl says:

All pages on this site are secure. You can tell a secure page vs a non-secure page by looking at the URL. URLs that begin with "HTTPS" (ending "S") are secure vs just plain "HTTP."

So, one of the balloon tutorials has this address: https://accuratecalculators.com/calculations/balloon-payment-calculation.

If you try clicking on it and you still get the warning, try typing the "S" into the address.

What browser are you using? Do you have another browser installed that you can try?

## Qais Haikal says:

well as i dont have that knowledge using this calculator can you help by solving this?

The price of a car you are interested in buying is $93.45k. You negotiate a 6-year loan, with no money down and no monthly payments during the first year. After the first year, you will pay $1.23k per month for the following 5 years, with a balloon payment at the end to cover the remaining principal on the loan. The annual percentage rate (APR) on the loan with monthly compounding is 5%. What will be the amount of the balloon payment 6 years from now?

Required: Suppose the loan has initially been paid in full (without a balance due at maturity), the amount would have totaled $37k. Calculate the absolute percentage difference between the fully amortized loan and the balloon payment.

## Karl says:

One of the points of this site is to help people to learn how to do financial calculations. I do not do the calculations for people.

Let take one question at a time. First, calculate the balloon amount for the 93.45K loan. That should be fairly straight forward. The only thing that is a bit unusual is the first yea without any payments. This calculator will handle that. For example, enter June 10, 2020 for the loan date and June 10, 2021 for the first payment date on the "Set Dates or Extra Payments." This gives you what we call a long first period. Note on the "Set Dates or Extra Payments." tab there is a "Long Period Options" setting. This controls when you see the interest for the first period. Either play with those setting or read about them on the page to understand what they do.

Enter your payment amount, loan amount, interest rate, and 0 for the ballon amount and you’re ready to calculate.

## Winston Pestana says:

Does this calculator utilise the Rule of 78 Principles? Thank you. Winston

## Karl says:

No, it does not. But this financial calculator will let users create schedules for balloon loans, and it also supports Rules-of-78. If you try it, scroll down the page to the tutorials. There are two about balloon payments.

## Winston Pestana says:

OK will do Karl! Thanks sincerely for your prompt response! Winston

## PRADYUMNA KUMAR NAYAK says:

ABC issued a note on January 1. 2017 to an outside lender in the amount of $1,000,000.

Note typeBalloon, interest only

Annual interest12.00%

Repayment frequencyEach calendar quarter on a 15th day after a quarter ends.

Repayment amountInterest only

Interest calculation conventionActual number of days over 360

Fill in the schedule below with calculated interest and outstanding principal

## Karl says:

Do you have a question?

## Frank A Lombardo says:

how do you change the start date of a mortgage loan schedule?

## Karl says:

Click on "Set Dates or Extra Payments" at the top of the calculator. You’ll be able to set the loan date and first payment due date. I’m not sure which of these you consider to be the start date though.

## Sri says:

Hi Karl,

when i try to calculate PMT on excel, it doesn’t provide me the same PMT which your calculator is computing

Data used is as follows: PV=45000000, Balloon @ 60th month = 27000000

Interest = 4% per year

i am computing PMT in excel as =PMT(4%/12,59,-45000000,27000000,0,0)

excel shows PMT as 426574.01 as financial calculator shows it as 427952.28

Please help

## Karl says:

Hi Sri, frequently Excel and this calculator will match, but you really can’t compare the two. For one thing, Excel does not allow the user to specify dates. Dates impact the results of the calculations, in some cases. Also, Excel does not give the user the ability to set a separate compounding frequency. Beyond that, I can’t discuss the math. If I did that, I would not have time to work on this site.