Balloon Payment Calculator

Your periodic payment is sized using a full amortization schedule (e.g., 30 years), but the loan actually ends much sooner (e.g., 7 years) — the balloon payment is the remaining loan balance at that point, calculated by projecting the balance forward using the same interest rate and payment.

Early payments on a long amortization schedule go mostly toward interest, not principal — so after 7 years of a 30-year schedule, you've barely dented the balance, leaving most of it due as a lump sum.

Typically: refinance into a new loan, sell the asset (common with balloon auto or commercial real estate loans), or pay the lump sum in cash if you've saved for it. Lenders rarely extend the term automatically.

A balloon loan usually has a lower payment than a loan fully amortized over the balloon term, because the payment is calculated over the longer amortization schedule — but it carries refinancing risk since rates may be higher (or credit tighter) when the balloon comes due.