Balloon Loan Calculator
Calculate monthly payments and final balloon payment for your balloon loan
How to Use This Calculator
Basic Calculations
- Enter the total loan amount you wish to borrow
- Input the annual interest rate
- Specify the loan term in years
- Enter the balloon payment due date
Understanding Results
- View your monthly payment amount
- See the balloon payment due at the end
- Compare total interest paid
- Analyze full amortization schedule
Understanding Balloon Loans
What is a Balloon Loan?
A balloon loan is a type of loan that doesn't fully amortize over its term. Instead, it requires a large final payment (the "balloon" payment) at the end of the term. Monthly payments are typically lower than a fully amortizing loan because they're calculated as if the loan had a longer term.
Common Uses
- Commercial real estate financing
- Business equipment purchases
- Bridge loans
- Construction loans
- Short-term business financing
Advantages
- Lower monthly payments than traditional loans
- Shorter term financing options
- Flexibility for businesses with irregular cash flow
- Opportunity to refinance before balloon payment
Important Considerations
- Large final payment requirement
- Refinancing may be necessary
- Higher risk if unable to make balloon payment
- May require strong credit for refinancing
- Market conditions could affect refinancing options