Balloon Loan Calculator
A balloon loan keeps monthly payments low by amortizing over a long schedule, but a large lump sum — the balloon — comes due after a few years. This shows the payment and the balloon amount.
Your details
- Monthly payment
- $1,199.10
- Paid before balloon
- $71,946.06
Payments vs balloon
- Payments before balloon
- $71,946.0628%
- Balloon payment
- $186,108.7172%
Formula
The monthly payment is amortized over the long schedule (e.g. 30 years). The balloon payment is the loan balance still outstanding at the balloon date, after those lower payments.
How it works
Balloon loans suit borrowers who plan to sell or refinance before the balloon is due. The risk is real: if you can't refinance or sell, you must pay a large sum at once, so have a clear exit plan.
Frequently asked questions
What is a balloon payment?⌄
A large, lump-sum payment due at the end of a balloon loan's short term, covering the balance left after smaller payments calculated on a longer amortization schedule.
Why choose a balloon loan?⌄
The lower monthly payments help cash flow, and it can work if you'll sell or refinance before the balloon comes due. It's common in commercial real estate and some auto loans.
What happens if I can't pay the balloon?⌄
You'd need to refinance, sell the asset, or risk default. That refinancing/selling risk is why a balloon loan requires a solid exit plan.
Sources & methodology
Payment amortized over the schedule; balloon = remaining balance at the balloon date. Excludes fees.
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