Balloon Loan Calculator
Calculate low monthly payments and the lump-sum balloon payment due at the end of the loan term.
EMI is calculated on the full amortisation schedule. At the end of the balloon period, the remaining balance is due as a lump sum.
A balloon loan offers lower regular monthly payments than a standard loan for the same amount, but requires a large lump-sum "balloon payment" at the end of the loan term. The monthly payments are calculated as if the loan were being repaid over a longer full amortisation period, but the loan is actually "called" (due in full) at an earlier date. This structure is common in commercial real estate, asset-backed lending, and some auto financing. The balloon amount is the remaining outstanding principal balance at that maturity date.
📋 How to Use This Calculator
Enter the loan amount, interest rate, and two tenure inputs: the balloon period (when the lump sum is due — e.g., 7 years) and the full amortisation period (the schedule used to calculate the monthly payment — e.g., 30 years). The monthly payment is lower because it is based on the longer 30-year schedule. The balloon payment is the outstanding balance on that schedule after 7 years of payments. The calculator shows the monthly payment, balloon payment amount, and total cost breakdown.
💡 Key Facts & Information
Balloon payment formula: Balance = P × [(1+r)^n − (1+r)^p] / [(1+r)^n − 1], where n = full amortisation months, p = balloon period months. For a ₹20 lakh loan at 9% amortised over 30 years with a 7-year balloon: monthly payment = ₹16,099, balloon payment = ₹17.3 lakh. The risk of balloon loans is refinancing risk — at the balloon date, you must either repay the lump sum, refinance, or negotiate an extension. If interest rates rise or your creditworthiness falls, refinancing may be at worse terms.