# 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.

## Dan says:

Have a 24 month balloon starting on 6/30/2022 amortized over 30 years with the first payment due 08/01/2022. The 23rd payment is due 06/01/2024. Why is the balloon not due until 07/31/2024?

## Karl says:

The loan date, 6/30/2022, has no impact on when the balloon is due. The balloon (which is a payment, of course) is calculated from the first payment date, 8/01/2022. I assume you entered payment #24 for when you want the balloon due. That would be 7/01/2024.

But no worries. Did you need a schedule with a balloon payment paid on July 31, 2024? In that case, use the Ultimate Financial Calculator which allows users to set any payment, including a balloon payment, to be due on any date.

Look for the links to the tutorials. There are 2 tutorials/guides specifically about balloon loans.

## Dan says:

Everything you stated was correct except the balloon date. It is automatically setting up the balloon payment for 7/31/24 instead of 7/1/24 charging the borrower internet for the entire month of July.

## Dan says:

Everything you stated was correct except the balloon date. It is automatically setting up the balloon payment for 7/31/24 instead of 7/1/24 charging the borrower interest for the entire month of July.

## Karl says:

I see now. I can’t duplicate what you are saying. That is, with the balloon being on 7/31/24. All the details are important. I guess the best thing to do if you want me to take a look is to copy and paste all your actual inputs into a reply to this message. To do that, you can select each tab on the calculator and select the text and inputs, and copy. But the schedule that I get, as I mentioned, shows the balloon due on 7/01/24.

## Dan says:

It will not allow me to copy/paste into this comment box. If the closing date is set for either 6/29 or 6/30/22 it moves the balloon payment(payment #24) to 7/31/24. It should be on 7/1/24 because payment #23 is on 6/1/24. If we move the closing date to 7/1/22 the problem is corrected with the balloon due on 71/24.

## Karl says:

The calculator on this page does not have a "closing date" option. Earlier, you had said that you had the "First Payment Due" set to August 1, 2022. First payment date is used to determine the balloon payment date.

I can think of one possible exception, and that is if your calculation also expects extra payments. Perhaps one extra payment goes past the balloon due date to make the balance 0?

## Karl says:

Using the calculator defaults, I set the dates to this:

The schedule shows the final payment (balloon) on July 1, 2024.

But now, I see the problem. When I look at the schedule a second time, the date does change to July 31.

I’ll let you know when I fix this. In the mean time, for closing/loan dates on 30, 31, please always have a 0 for one unknown when clicking on the "Payment Schedule" button. Then it should produce the correct schedule.

Sorry that I made this a roundabout problem trying to figure out what is going on.

## Dan says:

The loan date is the closing date. When set to 6/30/22 the balloon payment is due 7/31/24 instead of 7/1/24. The extra payment box is set to $0 and the balance is also $0 at payment #24. If the loan date is moved back a few days it sets the balloon date as 7/31/24. I have tried every option available to correct this with no luck.

## Karl says:

Yeah, I realized that closing=loan the second I clicked reply. Duh!

## Dan says:

Even with setting the number of extra payments to $0 instead of unknown it doesn’t change. Not sure what I should do as I cannot get it to show 71/24 as the balloon date

## Karl says:

What I had to do to get the correct schedule after the first calculation was set the "Periodic Payment" back to $0.

Then set the 1st payment date to a date less then the 28th and click on the "Payment Schedule" button

Then again set the periodic payment to 0 and the 1st payment date to either the 29th or 30th as needed and click on the "Payment Schedule" button.

## Karl says:

Dan, I fixed the issue with the dates. Thank you for letting me know, and sorry for the hassle.

If you do not see the fix, you may have to perform a hard refresh of the page:

Depending on your operating system all you need to do is the following key combination:

Above, from Refresh Your Cache.

## Ruth Koltookian says:

How do I add more than one extra payment to the amortization schedule as they come in? They are not always for the same amount or the same day each month.I

## Karl says:

Use this loan payoff calculator.

It allows users to track the payments as they are made – for any amount on any date.

Interest rates can be changed as well on any date (if you should need that too).

## Blalock Walters PA says:

Question: I am doing a balloon loan with set monthly payment with an annual extra payment. It is a 5 yr balloon loan, $2500 monthly payment, $6000 annual payment to principal. The extra payment for the 4th year will not calculate or show up on the schedule. I set the # to unknown and to 4 and still will not put it in for year 4. Any assistance would be greatly appreciated.

## Karl says:

Without the specifics (dates, amount of the extra payment, interest rate, etc.), I can’t say for sure why the calculator is not including an extra payment for the fourth year. However, since you know the number of extra payments you want/need, have you tried entering a number rather than "Unknown". If that still does not help, then please provide ALL the details. Details are important.

## Blalock Walters PA says:

The loan amount is $545,000, interest rate 5.50, $2500 monthly fixed payment, $6000 annual starting 09/22/2024, 5 yr balloon, start date 09/22/2023, 1st payment due 10/22/2023. no points, round last payment to zero, amortized

## Karl says:

Thank you for the details.

Since you didn’t mention when the balloon is due, I’m assuming that it is due at the end of the 5th year (i.e. period 60). The last payment of the 5th year is then Sept. 22, 2028.

If the extra payments start on Sept 22, 2024, AND the extra payments are not large enough to shorten the term due to principal prepayment, then the extra payments fall on:

Sept 22, 2024, Sept. 22, 2025, Sept. 22, 2026 and Sept. 22, 2027.

The Sept. 22, 2027 extra payment is missing. So I see what you mean. I’ll have to take a look at this.

In the meantime, I have two suggestions. The calculation "works" if that extra payments start on Sept. 21. That is, there will be an extra payment in 2027. But there will be some loss of accuracy since the extra payments are happening a day earlier that you are planning.

The other solution is to use the Ultimate Financial Calculator (link at the top of nearly all pages). I’ve created your schedule using the UFC and I’ll send you via email the details.

## Blalock Walters PA says:

Thank you. Yes, it balloons on the 5th year. I was able to go to the mortgage loan calculator and was able to manipulate it…so the attorney is happy for now, but it is a true “balloon” and would like the schedule to show accordingly. If possible, please email Linda as she is working directly with the attorney and borrower. I’ll try the day before and see if that works. ty

## Lisa Hadzima says:

How do I get the same/equal payment amounts for each month? I am trying to get a payment schedule for an interest-only balloon loan amortized over 30 years with the balloon payment at 3 years. I did step one (calculated interest only payments for 30 years) to get the periodic payment amount but even after I enter the specific periodic payment when I generate the payment schedule shows different amounts each month.

## Karl says:

Since you didn’t tell me your setting/inputs, I can only guess.

Here’s my guess. You have compounding set to either "Daily" or "Simple/Exact". Those options calculate interested based on the exact number of days in the period and since the number of days will change (assuming "Monthly" payments) the amount of interest will change.

If you happen to want interest-only with no compounding, and the payment frequency is Monthly, then set compounding to monthly.

## Ann Knowles says:

I am using the Balloon payment calculator, and want to add a One-time extra payment. There is no option for One-time extra payment, I only see daily, monthly, annual , etc.

## Karl says:

On the "Set Dates or Extra Payments" tab, you’ll find these options:

Set "Number of Extra Pmts" to "1" if you only want one extra payment. In that case, the frequency selection will be meaningless.

Hope this helps.