Balloon Payment Calculator
Work out the monthly payment and the final lump-sum (balloon) payment on a balloon loan. With a balloon loan you make smaller regular payments based on a longer amortization schedule, then settle the large remaining balance in one go at the end of the term. Enter your loan amount, rate, amortization term, and when the balloon falls due.
Formula
EMI = P × r × (1+r)^n / ((1+r)^n − 1)
Balloon = P×(1+r)^k − EMI×((1+r)^k−1)/r
where k = balloon month
- The monthly payment (EMI) is calculated as if the loan were fully amortized over the longer term, which keeps it low.
- The balloon payment is the loan balance still outstanding when the balloon falls due — it must be repaid in a single lump sum.
- A longer amortization term and an earlier balloon date both increase the size of the final balloon payment.
- r is the monthly rate (annual rate ÷ 12 ÷ 100); n is the amortization term in months and k is the balloon month.
- Plan ahead for the balloon — borrowers usually refinance, sell the asset, or save toward the lump sum before it's due.
PKR 1,000,000 loan at 20%, 60-month amortization, balloon after 24 months
Inputs
- Loan Amount (PKR): 1000000 PKR
- Annual Interest Rate: 20 %
- Full Amortization Term: 60 months
- Balloon Payment Due After: 24 months
The EMI is based on full repayment over 60 months, so it stays low. After 24 monthly payments, the large remaining balance is due as a one-off balloon payment, and the calculator also shows the total interest paid.
Frequently asked questions
What is a balloon payment?
It's a large, one-off payment that clears the remaining balance of a loan at the end of its term. The regular payments before it are kept low because they're based on a longer amortization schedule.
Why choose a balloon loan?
Balloon loans keep monthly payments low, which can help cash flow. They suit borrowers who expect to refinance, sell the asset, or have a lump sum available when the balloon is due.
What happens if I can't pay the balloon?
You'd typically need to refinance the remaining balance into a new loan or sell the underlying asset. Not planning for the balloon is the main risk of these loans.
How is the balloon amount calculated?
It's the loan balance still outstanding after your regular payments — the original principal grown by interest, minus the value of the EMIs you've already paid up to the balloon date.
Can I pay the balloon early?
Often yes, but some loans carry prepayment penalties. Check your loan agreement before paying ahead of the scheduled balloon date.