Partially Amortized Loan Calculator
Calculate monthly payments, balloon payment, and total costs for partially amortized loans with shorter payment periods than amortization terms.
Loan Parameters
Total amount of the loan you're taking from the bank
Annual interest rate for the loan
Period used to calculate monthly payments (e.g., 30 years)
Time in which you make monthly payments before balloon payment (e.g., 10 years)
Loan Results
Amortization Period: 30 years
Payment Period: 10 years
Interest During Payment Period: $962,466.08
Principal During Payment Period: $90,619.81
Loan Analysis
Payment Schedule
Yearly breakdown of payments during the 10 years payment period:
| Year | Payments | Interest | Principal | Remaining Balance |
|---|---|---|---|---|
| 1 | $105,308.59 | $99,492.59 | $5,816.00 | $994,441.21 |
| 2 | $105,308.59 | $98,883.58 | $6,425.01 | $988,300.35 |
| 3 | $105,308.59 | $98,210.79 | $7,097.79 | $981,516.46 |
| 4 | $105,308.59 | $97,467.56 | $7,841.03 | $974,022.21 |
| 5 | $105,308.59 | $96,646.50 | $8,662.08 | $965,743.20 |
| 6 | $105,308.59 | $95,739.47 | $9,569.12 | $956,597.28 |
| 7 | $105,308.59 | $94,737.46 | $10,571.13 | $946,493.67 |
| 8 | $105,308.59 | $93,630.52 | $11,678.06 | $935,332.07 |
| 9 | $105,308.59 | $92,407.68 | $12,900.91 | $923,001.71 |
| 10 | $105,308.59 | $91,056.78 | $14,251.80 | $909,380.19 |
| Balloon Payment | $909,380.19 | — | $909,380.19 | $0.00 |
Schedule shows yearly payments: After the payment period ends, a balloon payment of $909,380.19 is due to fully pay off the loan.
Example Calculation
Partially Amortized Loan Example
Loan Amount: $1,000,000
Interest Rate: 10% annual
Amortization Period: 30 years (360 months)
Payment Period: 10 years (120 months)
Results
Monthly Payment: $8,775.73 (based on 30-year amortization)
Total Paid in 10 Years: $1,053,088
Balloon Payment: $894,303
Total Cost: $1,947,391
Key Benefits & Risks
Benefits: Lower monthly payments compared to 10-year full amortization
Risks: Large balloon payment due at end of payment period
Use Case: When you expect a large cash inflow or plan to refinance
💡 Balloon Loan Tips
Plan for Balloon Payment
Ensure you'll have funds or refinancing options available
Lower Monthly Payments
Useful for cash flow management but increases total cost
Refinancing Strategy
Many borrowers refinance before balloon payment is due
Business Use
Common for commercial real estate and business loans
Balloon Loan Facts
Understanding Partially Amortized Loans
What is a Partially Amortized Loan?
- •Definition: Loan with monthly payments based on longer amortization but shorter payment period
- •Structure: Lower monthly payments followed by large balloon payment
- •Example: 30-year amortization with 10-year payment period
- •Balloon Payment: Remaining balance due at end of payment period
When to Use Balloon Loans
- •Cash Flow Management: When you need lower monthly payments
- •Short-term Ownership: Plan to sell before balloon payment
- •Refinancing Strategy: Expect to refinance before balloon
- •Expected Windfall: Anticipating large cash inflow
Calculation Formula
Monthly Payment Formula
P: Monthly payment
L: Loan amount
r: Monthly interest rate
n: Amortization period in months (not payment period)
Balloon Payment Calculation
B: Balloon payment
L: Original loan amount
m: Amortization period
p: Payment period
Frequently Asked Questions
What are the risks of a partially amortized loan?
The main risk is the large balloon payment due at the end. If you can't make this payment, you may face foreclosure or need to refinance under potentially less favorable terms. Market conditions and your financial situation may change over the payment period.
How does this differ from a fully amortized loan?
In a fully amortized loan, monthly payments gradually pay off the entire principal over the loan term. With a partially amortized loan, monthly payments are calculated as if the loan were longer, resulting in lower payments but leaving a large balance due at the end.
Can I pay extra principal during the payment period?
Yes, making extra principal payments can reduce the balloon payment amount. Any additional principal paid reduces the remaining balance, which directly decreases the final balloon payment. Check your loan terms for any prepayment penalties.
What happens if I can't make the balloon payment?
If you can't make the balloon payment, you may need to refinance the remaining balance, sell the asset, or face foreclosure. It's crucial to plan for this payment well in advance and have backup strategies in place.