Case 1
- How much is the loan?
- 250000
- What is the annual interest rate?
- 6.75%
- The payment is calculated over how many years?
- 30
- When does the loan fall due?
- 7
226,968.68
Open with these valuesBalloon Payment Calculator
226,968.68
Result: 226,968.68The instalment is sized against a long amortization period, but the loan matures years earlier — everything left is due at once. After seven years on a thirty-year amortization, that lump sum is still about 91 % of what you borrowed. Plan the exit before you sign.
Worked examples
Case 2
- How much is the loan?
- 250000
- What is the annual interest rate?
- 6.75%
- The payment is calculated over how many years?
- 20
- When does the loan fall due?
- 7
197,071.20
Open with these valuesCase 3
- How much is the loan?
- 35000
- What is the annual interest rate?
- 7.9%
- The payment is calculated over how many years?
- 8
- When does the loan fall due?
- 4
20,233.38
Open with these valuesHow it's calculated
B = P × (1 + i)^k − M × ((1 + i)^k − 1) ÷ i
- StepEnter the amount financed and the annual interest rate.
- StepEnter the amortization period the instalment is sized against.
- StepEnter the year the loan falls due — shorter than that period.
- ResultRead the lump sum still outstanding on the due date.
What this number means
A balloon loan is priced like a thirty-year mortgage but ends like a seven-year one, and this page answers the question that gap creates: what is still outstanding on the day the contract runs out. That is the figure you have to produce, and it decides whether the loan was ever affordable. Two stages produce it. The instalment is first sized as though the loan really ran the full amortization period: 250000 at 6.75 % over thirty years gives 1621.50 a month. The balance is then carried to the maturity date in closed form rather than month by month, so no rounding drift can accumulate — interest is added, each instalment subtracted, and after 84 payments 226968.68 remains. Those 84 instalments hand over 136205.60 in all, of which 113174.28 went to interest. On the car example in the table, 35000 over eight years due after four, 20233.38 is left, about 58 % of the loan. The result is the principal balance and nothing else: no prepayment penalty, no arrangement or valuation fee for a refinancing, no selling costs if the exit is a sale. It also assumes the contract runs exactly as written — a fixed rate, every instalment paid on time and no extra principal. Any overpayment lowers the lump sum, any missed payment raises it, and neither shows up in the figure above.
The whole balance falls due on one day
The instalment is sized against a long amortization period, but the loan matures years earlier. Everything still outstanding is due at once on that date.
After seven years, 91 % is still owed
On the default figures, 84 payments of 1621.50 hand over 136205 in cash and retire only 23031 of principal. That is 9 % of the loan repaid in seven years.
Shorten the amortization, not the maturity
The same loan due in seven years leaves 226968.68 amortized over thirty, or 197071.20 amortized over twenty. Roughly 279 more a month cuts almost 30000 off the lump sum.
Plan the exit before you sign
There are three legitimate exits — pay it in cash, refinance it, or sell the asset — and all three depend on conditions years away. Treat a refinancing plan as a hope rather than a guarantee, and have a second exit.
Commonly misread
Seven years of payments must have repaid a good chunk.
They repay 9 % of the loan on the default figures, which leaves a balloon of 91 %. The rest of the 136205 paid in was interest.
Moving the due date is what makes the balloon smaller.
A shorter amortization period is what moves it: over twenty years instead of thirty, the same loan due in seven leaves 197071.20 instead of 226968.68.
This is the same as an interest-only loan.
An interest-only loan repays no principal at all, so its balloon is the full original amount. This calculator models the amortizing kind, where each payment repays a little principal.
Reference table
| Loan, rate, amortization, due after | Share of the loan | Balloon due |
|---|---|---|
| 250000, 6.75, 30, 5 | 94 % | 234689.27 |
| 250000, 6.75, 30, 7 | 91 % | 226968.68 |
| 250000, 6.75, 30, 10 | 85 % | 213252.50 |
| 250000, 6.75, 20, 7 | 79 % | 197071.20 |
| 35000, 7.9, 8, 4 | 58 % | 20233.38 |
| 24000, 0, 10, 3 | 70 % | 16800.00 |
Questions
What is a balloon payment?
The single large sum still owed when a loan matures before it has been repaid. The instalments are sized against a long amortization period, typically thirty years, but the contract ends after five, seven or ten. Everything still outstanding falls due on that date, in one payment.
How is the balloon amount calculated?
In two steps: the payment comes from the annuity formula over the amortization period, then the balloon is the closed-form balance after k payments, B = P × (1 + i)^k − M × ((1 + i)^k − 1) ÷ i. For 250000 at 6.75 % amortized over thirty years and due after seven, the payment is 1621.50 and the balloon is 226968.68.
How much of the loan do the instalments actually repay?
Startlingly little. On the default figures, 84 payments of 1621.50 hand over 136205 in cash and retire only 23031 of principal; the rest was interest. That is 9 % of the loan repaid in seven years, which is why the balloon is 91 % of what you borrowed.
How do I make the balloon smaller?
Shorten the amortization period, not the maturity. The same loan still due in seven years costs 1621.50 a month amortized over thirty, leaving 226968.68 — or 1900.91 a month amortized over twenty, leaving 197071.20. Roughly 279 more a month cuts almost 30000 off the lump sum.
What happens if I cannot pay the balloon?
The lender can call the loan and enforce against the security. There are three legitimate exits — pay it in cash, refinance it, or sell the asset — and all three depend on conditions years away: your credit at that point, the asset's value, and the rates then available. Treat a refinancing plan as a hope rather than a guarantee, and have a second exit.
Is this the same as an interest-only loan?
No. An interest-only loan repays no principal at all, so its balloon is the full original amount. This calculator models the amortizing kind, where each payment repays a little principal.
Sources and last check
Information, not financial advice.