What is a balloon payment?

A balloon payment is a final lump-sum payment due at the end of a loan term. It reduces regular periodic payments but requires a large payoff at maturity.

What is amortization?

Amortization is the process of repaying a loan with regular payments where each payment covers interest and reduces principal; an amortization schedule shows this month-by-month.

How does extra principal affect my loan?

Extra principal payments go directly to the outstanding balance, lowering future interest and shortening the total payoff time.

Loan Calculator

Results

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Amortization Schedule

Exact payment-by-payment breakdown (amounts shown to cents). A final balloon payoff appears as a separate row if used.
Payment #	Payment	Interest	Principal	Balance
Total				—

Loan Terminology — Clear Definitions

Loan Amount: The total principal borrowed, shown in dollars and cents. This is the starting balance used to compute periodic payments and interest.
Interest Rate (Annual %): The nominal annual rate charged by the lender. This page converts the annual rate into the periodic rate that matches your selected payment frequency when calculating each payment's interest portion.
APR vs APY: APR (Annual Percentage Rate) represents the yearly interest cost for a loan without compounding. APY (Annual Percentage Yield) reflects compounding. For fixed installment loans, APR is the common quoted figure; this calculator uses the nominal rate you enter and applies periodic compounding consistent with your payment schedule.
Loan Term: The total length of the loan expressed in years or months. If you enter fractional years (for example 2.5 years), the calculator converts this to the matching number of payments for the chosen frequency.
Payment Frequency: The number of scheduled payments each year (monthly = 12, bi-weekly = 26, weekly = 52, etc.). Payment frequency determines the periodic interest rate and the number of periods used in amortization.
Amortization: The process of repaying a loan through periodic payments. Each payment covers interest on the remaining balance and reduces principal; amortization tables show each payment's split and remaining balance over time.
Extra Principal Payment: Any additional amount you pay above the scheduled payment that goes straight to principal. Extra principal reduces future interest and shortens the total payoff time; this calculator applies extra payments immediately to the outstanding balance.
Balloon Payment: An optional large lump-sum due at the loan's end. When specified, the calculator computes periodic payments assuming the balloon remains as a final balance and shows the balloon as the final payoff row in the schedule.
Total Interest: The summed interest paid across the loan's life (exact to the cent). This is the difference between the total of all payments and the original principal paid down over time.
Total of Payments: The complete amount paid across all scheduled payments (including any final balloon payoff), shown with two decimal places to indicate exact cents.