Partially Amortized Loan Calculator — Balloon Payment
A partially amortized loan keeps monthly payments low by calculating them over a long amortization schedule, but requires a large balloon payment when the shorter loan term ends. Enter the loan amount, rate, loan term and amortization period to see the monthly payment, balloon balance and total cost.
$
%
years
years
Lump-sum balance due at the end of the loan term
- 1
Monthly rate
r = 6.5% ÷ 12 ÷ 100 = 0.005417 - 2
Monthly payment
200,000 × 0.005417 ÷ (1 − 1.005417^−360) = 1,264.14Sized as if the full amortization period were used. - 3
(1+r)^k at loan term
1.005417^60 = 1.382817 - 4
Balloon payment
200,000 × 1.382817 − 1,264.14 × (1.382817 − 1) ÷ 0.005417 = 187,221.95
How does this calculator work?
Monthly payments are calculated on a long amortization schedule (e.g. 30 years), but the full remaining balance is due as a balloon at the end of a shorter loan term (e.g. 5 years). B = P(1+r)^k − M[(1+r)^k−1]/r. Payments stay low but a large lump sum is required at maturity.
Formula
How this is calculated
In a partially amortized (or "balloon") loan, the monthly payment is calculated as if the loan were being fully paid off over a longer amortization period — say 30 years — using the standard annuity formula M = P × r / (1 − (1 + r)^−n). But the loan actually comes due after a shorter term — say 5 or 7 years — at which point all remaining principal must be paid as a balloon payment. Because payments are sized for a long schedule, only a small fraction of the principal is paid down before the balloon arrives.
The balloon balance after k payments equals the outstanding principal: B = P(1 + r)^k − M × [(1 + r)^k − 1] / r. This is the standard amortization-schedule formula for remaining balance. The balance curve shows how slowly it falls compared to a fully amortizing loan of the same term.
Partially amortized structures are common in commercial real estate lending and some residential mortgages where borrowers anticipate refinancing or selling before the balloon is due. The risk is that if rates rise or credit tightens at refinancing time, the balloon may be difficult to roll over. This calculator uses nominal monthly compounding and assumes all payments are made on time — no prepayments or late fees.
Frequently asked questions
You would need to refinance the remaining balance into a new loan, sell the asset, or negotiate an extension with the lender. Balloon risk is the main drawback of partially amortized structures — always plan the refinancing exit before taking the loan.
A fully amortized loan sets the loan term equal to the amortization period, so the balance reaches zero exactly at the last payment. A partially amortized loan has a shorter term than its amortization schedule, leaving a large remaining balance (the balloon) due at the end.
Because the payment is sized to retire the debt over a longer schedule. Spreading principal recovery over 30 years rather than 5 years means each monthly payment carries far less principal repayment, keeping the payment amount similar to a long-term loan.
Also known as
TG we-Calculate Editorial Team. (2026). Partially Amortized Loan Calculator — Balloon Payment [Online calculator]. TG we-Calculate. https://we-calculate.com/calculator/partially-amortized-loan-calculator
TG we-Calculate Editorial Team. "Partially Amortized Loan Calculator — Balloon Payment." TG we-Calculate. 2026. https://we-calculate.com/calculator/partially-amortized-loan-calculator.
TG we-Calculate Editorial Team, "Partially Amortized Loan Calculator — Balloon Payment," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/calculator/partially-amortized-loan-calculator
@misc{wecalculate_partially_amortized_loan_calculator, title = {Partially Amortized Loan Calculator — Balloon Payment}, author = {{TG we-Calculate Editorial Team}}, howpublished = {\url{https://we-calculate.com/calculator/partially-amortized-loan-calculator}}, year = {2026}, note = {TG we-Calculate} }
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