Balloon Loan Calculator
A balloon loan has low payments based on a long schedule, with a large lump sum due at the end. Solve for the payment or the loan amount, and see both.
A worked example
Running this tool on current national benchmarks (Federal Reserve / Freddie Mac via FRED (St. Louis Fed)) — swap in your own numbers to see how the result moves.
- Solve for
- Monthly payment
- Loan amount
- $150,000
- Interest rate
- 7%
- Amortized over (years)
- 30
- Balloon due in (years)
- 7
after 7 years of $997.95/mo payments
- Monthly payment$997.95
- Loan amount$150,000
- Balloon payment$136,721
The math behind it
A balloon loan sets its monthly payment from a long amortization schedule — often 30 years — but the full remaining balance comes due much sooner, at the balloon date. The calculator computes the payment on the long schedule, then advances the loan to the balloon date and reports the balance still owed as the balloon payment. Because payments are sized for a long term, little principal is retired before the balloon comes due. You can solve for the payment from a loan amount, or the amount a payment supports.
What each input means
- Amortized over (years)
- The schedule the payment is based on.
Assumptions & limits
- The monthly payment is based on the longer amortization period, not the balloon date — that is what keeps it low.
- The balloon payment equals the outstanding balance at the balloon date, which you must refinance, sell into or pay in a lump sum.
- A fixed rate is assumed through the balloon date.
- No refinancing costs, prepayment penalties or reset provisions are modeled.
Common questions
What happens when the balloon payment comes due?
You owe the entire remaining balance in one lump sum. Most borrowers plan to refinance into a new loan, sell the asset, or pay the balance from savings. If none of those is available when the balloon hits, you can face default — so the exit plan matters as much as the low monthly payment.
Why is the monthly payment so much lower than a regular loan?
Because it is calculated as if you had the full amortization period — say 30 years — to repay, even though the loan actually ends in a few years. You are paying down principal at the slow pace of a long loan, which is exactly why such a large balance is left over as the balloon.
How much principal do I actually pay off before the balloon?
Usually very little. With payments sized for a long schedule, the early years are dominated by interest, so only a small slice of the original balance is retired by the balloon date. The calculator shows the interest paid by then and the principal reduction, which makes the gap clear.