# 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, but 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

#### Info...

## Using the Balloon Loan Calculator

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.

## Frank says:

1. Can you please make the schedule an Excel file?

2. Can you please add a field where I can specify the date of the first payment?

3. Thank you.

## Terri May says:

Please modify so you can specify specific loan dates.

## Karl says:

For that feature, please use the time value of money calculator. This calculator will support balloon loans and you’ll be able to set origination date, payment dates and balloon date to any date desired.

If you click on above link, scroll down the page and please see tutorial nos. 7 and 8:

Balloon Payment Calculation

Calculate the balloon amount

Balloon Loan Calculation

Calculate the periodic payment required to result in a specified balloon

If you try this calculator, I would be very interested to know how you make out.

## Karl says:

#2 – there is already a calculator on this site that will allow you to have a balloon payment and set the 1st payment date (or any payment date for that matter). Please see:

Ultimate Financial CalculatorThis calculator is our most flexible calculator. However, it may take some getting use to. To that end, there are 25 tutorials listed at the bottom of the page. Please see #7 and #8. (Note, the tutorials still have not been updated to reflect the new look, but the basic functionality between the old calculator and new one is the same. Ask question on that page if something isn’t clear.)

#1. This is where I get a chance to sell you something. The

C-Value!program will create a schedule and export to Excel. If you are using Windows you may want to consider using it. It costs $19.95. (Works in a very similar way to the above calculator.)Thanks for the comment.

## Bob W says:

Interested in this calculator. But you say $19.95 here and $49.95 on you price list

## Karl says:

The comment above with the price quote was written over 15 months ago. The price changed in January or February of this year.

## Joel says:

How can I change the dates on this calculator to reflect a loan schedule that shows a loan to be made 1/1/17 whose repayment starts 2/1/17?

## Karl says:

Not with this particular calculator. However, this loan payoff calculator will let you set dates (even setting the date individually for all payments should that ever be needed).

Depending on whether the regular payment is unknown or the balloon payment about is unknown, scroll down the page and see the tutorial #7 or #8 for examples.

If you have any question about its use, you can ask them on that page.

(Some calculators on this site do not offer date options so that they are smaller and work better on smaller devices. Additionally, for some requirements, setting dates is an unnecessary hindrance.)

## Stacy says:

I need to run several payment schedules with fixed payment amounts but I also need to choose the loan date (05/01/16). It seems all your calculators assume a loan date of the first of next month (04/01/16). Can you recommend another calculator?

## Karl says:

Thanks for asking. I see you found it, but for the benefit of others, the

amortization scheduleallows the user to select a loan date and first payment date.I’ll also point out that since you were looking at the balloon payment calculator, the the amortization schedule won’t support balloon loans. However this calculator,

time value of moneywill allow you to set the loan date and have a final balloon payment. (Note, the tutorial listed at the bottom of the page, still need to be updated. Hopefully they will be completed within the next two weeks.)## Gary Spray says:

How can I change the first payment date. The autocalc started in 6/1/2016 with first pymt due 7/1/2016. I need it to start with 1st pymt 6/1/2016.

Thank you for any info and assist.

Gary Spray

## Karl says:

This calculator is designed for rapid entry and therefore it is not possible to specify dates.

But, I do have a calculator that will handle balloons and give you full control over the dates. Please use the time value of money calculator.

And see these tutorials:

7. calculate the balloon amount

8. calculate the regular payment amount that results in specific balloon.

Please let me know how you make out. If the TVM calculator doesn’t meet your needs, tell me why, because I have one more idea as well.

## scott says:

I just tried the time value of money calculator for calculating balloon payments with specific dates.

It worked very good after reading

7. calculate the balloon amount

8. calculate the regular payment amount that results in specific balloon.

Took a few tries but I got it !! works well.

Even calculates interest with more than one month before first payment.

Thanks, keep up the good work!!

## Karl says:

Very glad to hear it worked for you Scott. Thanks for letting me know.

## Greg says:

Can you please add smart phone support? Tried on both a window phone and android but was able to edit any numerical fields. Only the drop down fields.

## Karl says:

I’ve got to try to get a hold of an Android device to try this. As far as I know, the site should work well with any modern device – handheld, tablet or desktop. I’ve personally tested with iPhone, iPad and all popular desktop browsers.

With Android, does it have next/previous buttons? Or tab/shift tab? If so, please try this. Rather than touch the screen and try to edit, use the keys to go to the next input and then try to type. My hunch, that will work.

In general, for edit to work, the number has to be selected OR type the backspace key to clear first.

Please let me know of any of these things help.

## Karis says:

Using the balloon payment calculator, I am unable to come up with the amount allocated to interest on the first payment made. Would you be able to tell me the exact calculation the program uses to figure the interest amount? (maybe I am not using the correct number of days, etc?)

## Karl says:

I have to limit the support to questions dealing with either how to use a calculator or what calculator to use to solve an explicit problem. But, unless you are using daily, exact or continuous compounding, the number of days has no part in the formula.

## amy@morgcpa.com says:

I want to customize the start date.

i also want to export the amort schedule to excel. How do I do that?

## Karl says:

Hi, then in that case, please use the Ultimate Financial Calculator. Scroll down the page and see tutorials 7 an 8:

## mburu says:

Hi,

Can one get a widget for the balloon payment calculator?

## Karl says:

You can do that with a calculator on this site, but not with this calculator. Please use the Ultimate Financial Calculator. Click on the "Settings" button and select "Rounding". Back sure it is set to "Open Balance".

Are you tracking loan payments? If so, scroll down the page and see tutorial #25.

## Karl says:

Sorry, but I have a lot of the other projects lined up and I won’t be creating any more plugin or widgets for the time being. I want to work on expanding this site. (Of course, if someone wanted to pay me some big bucks, I guess I could be persuaded to do a custom widget 🙂 )

## Emily says:

How can i settle balloon loan? I took a vehicle finance using a balloon loan from a bank and the payment started in August 2016 and will end September 2022. If i want to settle during 2020 financial year what are the disadvantage or any benefis? Please advise me regarding the matter

Thank you

## Karl says:

You can settle the loan by paying the balance due at any point.

As to the advantages or disadvantages, since I’ve not seen the terms of your specific loan, I’m not in a position to say. But, in general, if someone pays back a loan early, they will have (should have) the benefit of some interest savings which then can be used for something else.

FYI: In general, I limit my replies to either answering questions about either what calculator is best to use for a particular problem; or how to use a particular calculator.

## Cynthia says:

This is a very awkward, complicated, user-unfriendly site. Will not be back. Very frustrating and impossible to understand.

## Karl says:

Thank you for expressing your opinion Cynthia.

## Mary Sandor says:

Is there a way to convert this schedule into excel?

If not, is there a way to have the payments start March 1, 2018 ?????

## Karl says:

As you’ve discovered, the user can’t override the default dates with this calculator. You can copy/paste the print preview to Excel, but I guess you would want the schedule to update interest when you change the date. That won’t happen.

For your needs, what I suggest is that you use financial calculator. It will create balloon schedules and you’ll have full control over dates and interest rates as well. If you try is, scroll down the page and see these tutorials:

I also recommend looking at tutorial #1 to get started.

## Mary Sandor says:

Not sure if my first request went thru……….

Can you please make the schedule an Excel file?

If so, can you please add a field where I can specify the date of the first payment?

## Karl says:

Yup, got it sorry for the delay in responding. We are on the US east coast and we lost power due to a storm.

## Pete says:

How to calculate if there’s additional principal payment made?

## Karl says:

You can’t with this calculator.

However, with this calculator you can create a schedule with extra payments for a balloon loan.

Once on the webpage, scroll down to the tutorials. There are some with examples of both balloon and extra payments. I also suggest that you look at tutorial #1 to get an overview.

## Pete says:

I thank you so much Karl, I love this calc. It’s very helpful.

## Seth says:

We are closing a $39,000 loan on 5/31/2018. Terms are: Interest rate of 2.18% amortized over 30 yrs, with first payment due 7/1/2018 and a balloon payment due 6/1/2021 at the end of 3 years. Interest paid in arrears with each payment. The calculator works great for the balloon, but I can’t get it to show the initial interest payment due at closing. Is there a way to show this? Thank you.

## Karl says:

This calculator won’t do what you need.

However, this loan calculator will.

If you try it, go to the options page to set the dates and set the long period interest option to "with origination" if you want to have the interest collected or due on the day the money is lent.

For the balloon, you’ll enter the 4 numbers for loan amount, ballon payment due number is number of periods, the interest rate and the payment amount. The calculator will not need to calculate anything, other than the schedule, since you already know these four values.

## Seth says:

It worked! Thanks!!