This loan calculator helps you calculate monthly payments, total payment, and total interest with the inclusion of a balloon payment at the end of the loan term.

Formula:

Monthly Payment = (Loan Amount × Interest Rate / 100 / 12) / (1 – (1 + Interest Rate / 100 / 12)^(-Loan Term × 12)) + Balloon Payment / Loan Term
Total Payment = Monthly Payment × Loan Term × 12 + Balloon Payment
Total Interest = Total Payment – Loan Amount

Example Calculation:

$100,000 loan amount, 5% interest rate, 30-year term, $20,000 balloon payment → Monthly Payment = $536.82, Total Payment = $193,639.71, Total Interest = $93,639.71

Why It Matters:

The balloon payment allows for smaller monthly payments but requires a larger lump sum at the end of the loan term. Be sure to plan accordingly!

FAQs

What is a balloon payment? It’s a large payment made at the end of the loan term, typically larger than the regular monthly payments.

How do I prepare for the balloon payment? Make sure you save for the balloon payment throughout the term, or refinance it if needed.

Can I refinance the balloon payment? Yes, many borrowers refinance the balloon payment into a new loan.