Balloon Loan Calculator: Easily Determine Your Final Payment Amount
The Balloon Loan Calculator shows how much you still owe after making regular payments. Enter four numbers—loan amount, payment, interest-per-period, and total payments—and the tool returns the balloon balance in seconds. Balloon loans funded 9 % of U.S. small-business credit in 2022 (Federal Reserve, 2022).
Balloon Loan Calculator
Balloon Balance:
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How to use the tool
Fill in four fields.
Present Value: total borrowed. Example A: $100,000; Example B: $250,000.
Payment: each periodic instalment. Example A: $600; Example B: $2,000.
Rate Per Payment (%): periodic interest. Example A: 0.40 %; Example B: 0.30 %.
Number of Payments: total instalments. Example A: 60; Example B: 36.
Press “Calculate”. The tool returns the unpaid principal (balloon balance) instantly.
Interpret the output. Use it to plan refinancing, asset sale or savings.
Underlying formula
$$\text{Balloon Balance}=P(1+r)^{n}-PMT rac{(1+r)^{n}-1}{r}$$
where P=present value, r=rate per payment, n=number of payments, PMT=regular payment.
Worked examples
Example A:
$$P=100{,}000,\; r=0.004,\; n=60,\; PMT=600$$
$$Balloon=100{,}000(1.004)^{60}-600 rac{(1.004)^{60}-1}{0.004}\approx\$86{,}450.$$
Example B:
$$P=250{,}000,\; r=0.003,\; n=36,\; PMT=2{,}000$$
$$Balloon\approx\$202{,}500.$$
(Calculations verified with spreadsheet functions.)
Quick-Facts
Typical balloon mortgage term: 5–7 years (CFPB, 2023).
Auto balloon payments are often 30–50 % of sticker price (J.D. Power, 2022).
Refinance fees average 1–2 % of balance (HUD Closing Cost Guide, 2023).
FAQ
What is a balloon loan?
A balloon loan is a short-term note with small periodic payments and one large final payment that clears the remaining principal (CFPB, 2023).
Why choose a balloon structure?
You lower monthly outflow, freeing cash for operations or investments; 63 % of surveyed firms cited “cash-flow flexibility” as the main reason (NFIB, 2021).
How is the balloon balance calculated?
The calculator compounds the original loan by the periodic rate and subtracts the amortised portion using the formula shown above—identical to the Excel FV function (Microsoft Support, 2023).
Can I reduce the final payment?
Yes. Extra principal payments or a higher regular payment shrink the balloon because they increase the amortised portion (Investopedia, 2023).
What happens if I cannot pay the balloon?
You must refinance, sell the collateral, or default. Lenders report that 78 % of balloon borrowers refinance (Fitch Ratings, 2022).
Does the calculator include fees?
No. Input only principal, rate and payment; add projected fees manually to your planning.
Is interest rate entered as annual?
Enter the rate per payment period. For a 6 % APR with monthly payments, divide by 12 to get 0.5 %.
How often should I update the inputs?
Update whenever the interest rate changes, you make unscheduled payments, or you alter the payment schedule.
Important Disclaimer
The calculations, results, and content provided by our tools are not guaranteed to be accurate, complete, or reliable. Users are responsible for verifying and interpreting the results. Our content and tools may contain errors, biases, or inconsistencies. We reserve the right to save inputs and outputs from our tools for the purposes of error debugging, bias identification, and performance improvement. External companies providing AI models used in our tools may also save and process data in accordance with their own policies. By using our tools, you consent to this data collection and processing. We reserve the right to limit the usage of our tools based on current usability factors. By using our tools, you acknowledge that you have read, understood, and agreed to this disclaimer. You accept the inherent risks and limitations associated with the use of our tools and services.
