Balloon Loan Calculator

Why a Balloon Payment?

I originally created this spreadsheet to figure out a balloon loan payment schedule for a car loan or auto loan. Why? Mainly because I didn't have the cash in hand to pay for the car in one lump sum, but I knew that I would after 6 months (because after 10 years of being a student, I was finally going to have a job). So, to keep the monthly payments low at first, we set up a 3-year loan with the plan to pay the loan off completely after about 6 months.

Rounding

The new version of the balloon loan calculator (v1.3) takes into account the fact that the regular payment and the interest are rounded to the nearest cent. The "Balloon Payment w/Rounding" value is taken directly from the amortization schedule, and is adjusted so that the loan final balance is zero.

Using the Balloon Payment Calculator for Mortgages

This spreadsheet can be useful as a mortgage calculator, particularly for calculating the balloon payment that is made when you sell your house after a number of years. However, there are many other costs associated with home buying/selling that the calculator does not take into account, such as property taxes, escrow payments, mortgage insurance, homeowner's insurance, closing costs, etc.

Interest-Only Mortgage Loans

An option has been added to the spreadsheet to choose between monthly payments that are amortized vs. payments that are interest-only. Warning! While interest-only loans may look appealing due to the low monthly payment, you still have to pay off the loan eventually. Beware of the consumer debt spiral!