Balloon Payment Calculator
Find the monthly payment on a car loan with a lump sum at the end — and how much extra interest it costs.
- Payment without balloon (normal loan)—
- Lower payment each month—
- Balloon due at the end—
- Amount financed—
- Total interest—
- Extra interest vs. a normal loan—
- Total paid (down + payments + balloon)—
Saved scenarios
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Estimates for education only — not financial, tax or legal advice. Lenders may calculate taxes and fees differently by state or province. Always check your contract.
What is a balloon payment?
A balloon loan leaves part of the price — the balloon — unpaid until the end. You pay interest on the whole balance, but the monthly payments only repay the part above the balloon. The result is a lower payment, a large final bill and more interest overall.
Worked example
A $30,000 car with $3,000 down, a 35% balloon ($10,500), 6.9% APR and 48 months gives a payment of about $454.72. A normal loan for the same car would be about $645.30. The balloon saves about $190 a month, but you still owe $10,500 at the end and pay more interest in total.
Your options at the end
- Pay the balloon in cash and own the car outright.
- Refinance the balloon with a new loan, at whatever rate is available then.
- Sell or trade in the car and use the money to pay the balloon. If the car is worth less than the balloon, you pay the difference.
Check the car's likely value with the car depreciation calculator before choosing a big balloon. In the UK the same structure is called PCP — see the PCP calculator.
Frequently asked questions
How is a balloon payment calculated?
The balloon is usually a percentage of the car price, often 20–40%. The monthly payment then repays the rest of the loan plus interest on the full balance.
Is a balloon loan cheaper than a normal car loan?
The monthly payment is lower, but the total interest is higher because the balloon stays unpaid until the end.
What happens if I can't pay the balloon?
You can usually refinance it or sell the car to cover it. If the car is worth less than the balloon, you must pay the shortfall.
Can I pay off a balloon loan early?
Usually yes, although some lenders charge an early repayment fee. Paying early saves interest.
What balloon percentage is common?
Between 20% and 40% of the price is common, depending on the term and the car's expected value.
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