How this number is made
A balloon loan bills you as if the loan lasted a long time, then wants the remaining balance on a shorter date. The payment looks like a 30-year loan. The risk is the balance due at the balloon.
- Amortized-over is the term used to set the payment.
- Balloon due-in is when the balance has to be paid or refinanced.
Formula
Payment is the amortizing payment on the long term. The balloon is the scheduled balance after the short term’s payments.
Worked example
With the figures already in the form, balance due at the balloon is $182,295.
Questions
What if I cannot refinance then?
The balance is still due. This page does not assume a future lender. That is the point of looking at the balloon now.
Is the last payment only the balloon?
The last month is the regular payment plus the remaining principal, depending on how the note is written. The figure here is the remaining principal.