Balloon loan calculator
A balloon lowers the monthly payment by deferring part of the amount to the end, but that part accrues interest the whole time.
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How to use it
- Enter loan amount, annual interest rate, repayment term and balloon as share of the loan.
- The result appears straight away and updates as you edit.
- Copy the result, or copy a link that keeps the same values to share it.
How it is calculated
Balloon B = P × balloon %. Payment = (P − B × (1 + r)^−n) × r ÷ (1 − (1 + r)^−n). At 0% the payment is (P − B) ÷ n.
Example
Inputs: Loan amount = 100,000, Annual interest rate = 5 %, Repayment term = 60 months, Balloon as share of the loan = 30 %. Result: Monthly payment: 1,445.99; Balloon payment: 30,000.00; Total interest: 16,759.18.
Limits and caveats
- The balloon share is of the amount financed. If your contract states it as a share of the car price, convert it first.
- Assumes a declining balance rate, not a flat rate.
Questions about this tool
Does a balloon lower the total cost?
No, it lowers the monthly payment but raises total interest, because part of the debt stays outstanding to the end.
What if the balloon is 100%?
The payment becomes interest only and the whole amount falls due at the end.
What happens when the balloon falls due?
You pay it in cash, refinance it or sell the asset, depending on your contract, so plan for it from day one.