Loan with a large final payment. The Balloon Payment Calculator takes loan amount, interest rate, term, balloon payment at the end and returns monthly payment plus total paid including the balloon, total interest, payment without a balloon, for comparison. Results update as you type, and the formula is shown under the result so you can repeat it in your own spreadsheet.
The headline interest rate is only part of what a loan costs: fees, the structure of repayments and how the rate is quoted (flat or reducing) all change the true cost. Compare offers on total interest and effective rate, not on EMI alone. Use the worked example below to check the maths against your own figures.
How the Balloon Payment Calculator works
A balloon loan amortises only part of the principal during the term and leaves a large final payment. Monthly payments are lower, but the balloon must be paid or refinanced, and the total interest is higher.
Worked example
With the example values (loan amount of $300,000, interest rate of 8%, term of 5 years, balloon payment at the end of $150,000), the monthly payment is $4,041.46; total paid including the balloon $392,487.55, total interest $92,487.55, payment without a balloon, for comparison $6,082.92. Change any figure above and the result updates immediately; use Copy results to paste the summary into a note or email.
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Frequently Asked Questions
How is monthly payment calculated?
monthly payment = (amount − balloon ÷ (1 + i)n) × i ÷ (1 − (1 + i)−n).
Which figures do I need?
Loan amount, interest rate, term, balloon payment at the end. Take them from the same period and the same set of accounts or reports so the ratio is consistent, and check the example values as a guide to the units expected.
Does the result include fees and charges?
Only where there is a fee input. Processing fees, insurance and prepayment charges add to the true cost; the APR and loan comparison calculators include them.
