Calculate the Regular Payment with a Specified Balloon

Structure a loan to meet your needs.

Calculate the periodic payment amount required to result in a user specified final balloon payment. Other financial calculators can calculate the balloon amount, but the Ultimate Financial Calculator as well as the Balloon Payment Calculator are also capable of calculating the normal periodic payment required to end with a specified balloon payment. This gives you the ability to structure a loan to meet your specific needs.

All users should work through the more detailed first tutorial to understand the Ultimate Financial Calculator's (UFC) basic concepts and settings.

To create a loan schedule with a known balloon payment amount and unknown periodic payments, follow these steps.

  1. Set "Schedule Type" to "Loan"
    • Or click the [New] button to clear any previous entries.
  2. Set "Rounding" to "Open balance — no adjustment" by clicking on the {Settings} {Rounding Options}
  3. In the header section, make the following settings:
    1. For "Calculate Method" select "Normal".
    2. Set "Initial Compounding" to "Monthly".
    3. Enter 6.75 for the "Initial Interest Rate".
  1. In row one of the cash flow input area, create a "Loan" series
    1. Set the "Date" to July 1, 2020
    2. Set the "Amount" to 365,000.00
    3. Set the "# Periods" to 1
      • Note: Since the number of periods is 1, you will not be able to set a frequency. If a frequency is set, it will be cleared when you leave the row
  1. Move to the second row of the cash flow input area. Select "Payment" for the "Series" type. For this example, we will assume we want to create a schedule for a mortgage that has a balloon payment of $250,000 which is due after 5 years (at the 60th monthly payment).
    1. Set the "Date" to August 1, 2020
    2. Set the "Amount" to "Unknown" by typing "U" Fig. 1
    3. Set the "# Periods" to "60"
  2. Enter the known final balloon amount
    1. Move to the third row of the cash flow input area. Select "Payment" for the "Series"
    2. Set the date to "August 1, 2025" if it isn't already (end of the 5th year)
    3. Set the "Amount" to "$250,000"
    4. Set the "# Periods" to "1"
Calculate periodic payment amount for a balloon loan
Fig. 1 calculate periodic payment amount for a balloon loan
  1. Calculate the unknown. The regular payment amount required which results in a $250,000 balloon payment after 5 years is $3,689.51. Fig. 2
Periodic payment calculation result
Fig. 2 periodic payment calculation result
  1. To see a detailed amortization schedule showing the calculated periodic payment as well as the final balloon payment amount, click on the [Schedule] button on the button bar.

When a loan does not adhere to a conventional payment schedule, you need a financial calculator that gives you the flexibility to enter irregular cash flows. The Ultimate Financial Calculator supports multiple payment cash flows with varying dates.