# 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 |

## 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.

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.

## Tony says:

Hi Karl – you were of great assistance to me on 17th April last.

I now have a related question for you as follows;

Run the following Calculation through the Balloon payment calculator;

+ Capital borrowed £1,895,807

+ Payable x 84 months at £21,741 per month followed by a Balloon of £405,000 as an 85th payment.

+ Loan drawdown of 23/10/20 [using European dates here].

+ First Payment on 31/10/20.

+ APR is 4.00%

So I set Short period Option to Reduce all . . . .

When I check Interest rate the Calculator tells me that the last Payment due has been reduced by £6,159 due to rounding to £398,843 . . . Adding back brings me to expected £405,000.

I am completely confused by a rounding of this size – so I am assuming that I’ve done something wrong on the Amortization side of things.

Help, please.

## Karl says:

Hi Tony, I’ll have to take a look at this more closely. It may not be appropriate to have the message about rounding on this schedule since the calculator is going to calculate the balloon amount necessary to pay off the loan. The adjustment might not be due to the short period.

Did you use the calculator to calculate any of your values (payment or balloon), or are those your inputs?

## Tony says:

Hi Karl – the unknown Value when I ran the calculation initially was the Interest rate being charged with the Loan Amount, the Value and Volume of Loan repayments, the Balloon, Date of first and Monthly thereafter Payments all known.

I tried playing around with other Variables but everything still came back to the same Balloon and rounding number . . . .

Is there a way to share the Payment Profile, I’ve saved a PDF with you, if that would help . . .

## Karl says:

Hi Tony, is the only thing you are questioning is the rounding amount shown on the schedule? As I think about it, I think that is somewhat of a meaningless number when there is a final balloon payment. The various calculators on this website share reports (programming code) in the interest of efficiency. The balloon payment is going to be what the balance is, plus accrued interest since the last payment. I’m not sure what the rounding amount means, in this case, since the last payment (balloon) is not equal to the prior payments. When this note appears if users are using other calculators it means the normal periodic payment is, for example, 556.75, and the final payment to pay the principal balance plus accrued interest is 555.25 which means the last payment was rounded (down) 1.50 relative to all the other payments.

As you can see, we do not have that case when there is a balloon payment.

## Robin Rickerson says:

Can you help me please…???

I need to do an amortization schedule with the following information:

$63,750 loan amount

Starts 2/26/2021

Simple interest at 6%

10 year amortization

1st payment not due until month 24

Balloon payment due month 60

## Karl says:

Hi, you’ve given me the details, but you’ve not asked a question. Can you tell me what you’ve tried, or what’s not clear?

## John Babb says:

I used the calculator to create an amortization schedule with the following terms:

Loan Amount $450,000

Start date 8/1/21

Rate 5.0%

Term 10 Years (120 Months)

Balloon Payment $50,000

Balloon Payment Due – End of Term (Month 120)

While I was able to print the schedule I couldn’t find where to download the Excel sheet, can you help? Thank you

## Karl says:

The balloon payment calculator doesn’t create an Excel spreadsheet. If you want to export to Excel, you’ll need to purchase C-Value!.

## Kevin White says:

is this available as a WP plugin like some of your others?

## Karl says:

No, it is not.

## Kevin White says:

Is it possible to use it via html? With permission?

## Karl says:

If you are asking can we negotiate a license and appropriate fee for you to use it on your site? Sure. We can do that. You can reach me via the email address on the contact page.

## Brad says:

I am trying to make a Balloon payment schedule total principle $41,000 with 28 interest payments at 8.5%. 2 Xtra principle payments due December 2020 and 2021 that are 12k each started 9/1/20 first payment 9/1/20. When I put in $12000 as payment then 2 payments it just keeps just putting in the first 12k payment on Dec 2020 but not the 2nd $12k payment on Dec 2021 throwing off the final payment and each monthly interest only payment. I tried changing it to $24k as payment but it then just puts the $24 k in the Dec 2020 area. How can I get the two $12k payments on Dec 2020 and Dec 2021. 28 total interest only payments with a final Balloon payment due on 1/1/23

## Karl says:

When you entered the extra payments, did you enter 2 for Number of Extra Pmts, and set Extra Payment Frequency to annual? That should work.

If it doesn’t please copy your inputs to a reply, and I’ll take a look. (You should be able to select the inputs and copy/paste.)

## Sharon Ites says:

Hello,

Working with the balloon calculator using extra payments, and I am wondering how

you enter different dates that the payments were made, and also how to

change the amounts of the extra payments. Then if I copy and paste the url to

save what I have done, can I continue to add extra payments while keeping the ones

already recorded?

## Karl says:

If you are trying to record exact payments as they are made, then I would not use this calculator.

Rather, please use Ultimate Financial Calculator.

Scroll down the page for the link to the tutorials. There are 2 tutorials about balloon payments and one or two about extra payments.

At a high level, the calculator allows the user to enter any payment amount on any date. Save their work. And later recall it. It will keep a running balance.

## Sharon says:

With the ultimate calculator could I do both, balloon loan with extra random payments?

Thank you for your help

## Karl says:

Yes, you can. The tutorials will show you how to do both. Once you look at them and give the steps a try, if you have questions, just ask.

## Betty Pinkerton says:

12 years ago my sister lent me 8400.00 to be repaid when I could, if ever. I am now able to repay her and would like to pay it back with 5% interest even though I know she doesn’t want interest. If interest was added yearly, how much would the total come to?

## Betty Pinkerton says:

Never mind. I figured it out on my own that it’s a little over $15,000. Thanks anyway.

## Karl says:

This loan calculator would probably be the better (easier) calculator to use for what you want to do.

## Chris Musgrove says:

How do I calculate the following with your tool:

Loan amount: $30,000

Interest Rate: 7%

Loan start date: 12/21/2018

First payment date: 01/21/2022 and due monthly thereafter

Term: 6 years (first 3 years is interest only)

## Karl says:

The balloon calculator won’t handle the calculation due to the initial interest-only payments.

However, the Ultimate Financial Calculator will handle the calculation.

You might want to also see the tutorials. See #14 for initial interest-only payments. After you try it, if you have questions, just ask.

## Erica Osborne says:

Is there a way to do $300,000.00, Balloon 60 months, Principal only payments of $5800 until balloon due. Interest at end of balloon of 6%

## Karl says:

Yes, but not with this balloon payment calculator.

Please use the Ultimate Financial Calculator. Scroll down the page to the tutorials. There are a couple about balloon payments. And you’ll need to set a series as principal first until the balloon period.

## Laura says:

Question, I’m trying to create a schedule, interest only, 5 year balloon, with an annual principal payment due on the first payment beginning of years 2-5. I’ve tried # of extra payments as “unknown” as also as “4”, however, the calculator does not apply the annual principal payment to year 5. Help! I love this calculator!

## Karl says:

You will probably need to use this calculator.

But I’m not sure that I understand everything. Are the payments annual? And the payments will just be applied to the principal? I need to understand these details before I can be confident that the recommended calculator will do what you need.