Balloon Payment Calculator

A balloon payment is a large final payment due at the end of a loan term. Balloon loans have lower monthly payments because only part of the loan is amortized, with the remainder (typically 20-40% of the loan amount) due as a lump sum at the end.

Balloon loans can be beneficial if you need lower monthly payments and have a plan to pay the balloon (refinance, sell vehicle, or save for payment). However, they're risky if vehicle value drops below the balloon amount or you can't secure refinancing. Most financial advisors recommend avoiding balloon loans.

If you can't pay the balloon payment, you'll need to refinance it (if vehicle value allows), sell the vehicle, or default on the loan. Defaulting severely damages your credit. Some lenders may offer to refinance, but terms may be less favorable.

Yes, you can refinance the balloon payment into a new loan, but this requires good credit and vehicle value sufficient to cover the balloon amount. If the vehicle is worth less than the balloon, you may need to pay the difference or may not qualify for refinancing.