This calculator supports interest-only payments (select the option under "Amortization Method"). Interest-only option selected for the regular periodic payments Paying only the interest each period reduces the payment amount even more for the borrower. 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. Thus with each payment, the loan balance is being reduced.īut what if the borrower wants to pay even less per period? Most frequently, the periodic payments get allocated to both principal and interest. The Interest-Only Payment Method is a Special Case That is if they even let you plan for extra payments between regular payments. This is the correct way to apply the payment - something that other online calculators don't usually handle properly. Note how the interest-only payment drops from $545 to $526 after the extra payment. Balloon loan schedule with interest-only payments and a lump sum extra payment. 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. (In that case, set the number of extra payments to "Unknown.") The multiple extra payments can be for 2 or any number up until the loan is paid-in-full. You can, therefore, schedule extra payments between the regular due dates if doing so is better for your cash flow.Īs mentioned elsewhere, the calculator allows for a one-time extra payment or for multiple extra payments. First, you'll notice the calculator prompts you for "Extra Payments Start?" date. The calculator's support for extra payment is very flexible. You can structure a loan, just the way you want it.īalloon Amortization Schedule with Extra Payments If that's what you wanted to know - what the balloon payment amount will be for a loan, then you're finished.īut with this calculator, it's possible to do more. Step 2: Now to calculate the balloon payment amount, with the balloon due after six years, set the calculator as follows: Amount of Loan?:Ĭlick "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)?:Īmortization schedule showing final balloon payment. (The final payment gets rounded by less than $2.00 or less than $0.01 per each regular payment.) Periodic Payment?: $737 is the "regular" payment amount for a 30-year loan. That is the final payment will not be a balloon payment.Ĭlick "Calc" and here are the results. 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. You want the monthly payment calculated based on a 30-year loan, but you'll pay the balance after 72 months. 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.Įxample: Assume you are considering a mortgage for $146,500. See "Doing the Two-Step" belowĪs 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). 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.Or do you want to lower the periodic payment even further? Then select interest-only payments.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 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.Want to know what periodic payment will result in a specific final balloon amount? This calculator will calculate the regular payment.This Balloon Loan Calculator will not only calculate the final balloon payment, it will also help you structure a loan to meet your exact needs.Ĭheck out these additional loan scenarios:
The final payment is called a balloon payment because of its large size." 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. Balloon loan - a whimsical name don't you think for a potentially risky financial product?
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