Balloon Loan Calculator (Monthly Payment With a Final Lump Sum)
Monthly payment of a loan that leaves a balloon payment due at the end, the payment you would make with no balloon, and the total interest.
Results
The dashed line marks the value you entered.
What this tool does
A balloon loan keeps the monthly payment low by paying off only part of the debt over the term; the rest, the balloon, falls due in one lump at the end. The payment is that of a normal loan on the loan amount minus the present value of the balloon, which is why a bigger balloon means a smaller payment. The catch is the last day: you need the cash, a sale or a new loan to clear it, and since the balance stays higher for longer, the total interest is higher than on a loan of the same term that repays in full.
Formula
PMT = (P − B ÷ (1 + i)^n) × i ÷ (1 − (1 + i)^−n) (i = monthly rate, n = months, B = balloon)
Variables
| Symbol | Meaning | Unit |
|---|---|---|
p | Loan amount | — |
r | Annual interest rate | % |
y | Term in years | — |
b | Balloon payment due at the end | — |
PMT | Monthly payment | — |
PM0 | Monthly payment with no balloon (for comparison) | — |
TP | Total paid | — |
TI | Total interest | — |
Worked example
- Loan amount200,000
- Annual interest rate5 %
- Term in years5
- Balloon payment due at the end100,000
- Monthly payment2303.79
- Monthly payment with no balloon (for comparison)3774.25
- Total paid238,227.40
- Total interest38,227.40
Limitations
- This is an informational calculator, not personalised financial advice. Rates, fees, taxes and contract conditions vary between institutions and countries.
- The tool works with whatever currency you use for the inputs; it does not convert between currencies.