Partially Amortized Loan Calculator - Balloon Payment

A partially amortized loan follows a longer amortization schedule for calculating monthly payments, but the loan matures before it is fully paid off. The remaining unpaid principal — called a balloon payment — becomes due all at once at the end of the actual loan term. For example, a loan may be amortized over 30 years but have an actual term of only 7 years.

A balloon payment is a large lump-sum payment due at the end of a partially amortized loan. It represents the remaining unpaid principal balance that has not been paid off through regular monthly payments. Because payments are calculated on a longer amortization schedule, less principal is paid down each month, resulting in a large balance remaining at maturity.

Partially amortized loans are common in commercial real estate, construction loans, and some business financing scenarios. They allow borrowers to keep monthly payments lower while committing to a shorter actual loan period. Borrowers often plan to refinance, sell the property, or use other funds to cover the balloon payment at maturity.

With a fully amortized loan (like a standard mortgage), the loan is completely paid off by the last regular payment — there is no remaining balance. With a partially amortized loan, regular payments only cover part of the principal. At maturity, a balloon payment is required to settle the remaining balance. Partially amortized loans typically have lower monthly payments but require planning for the balloon payment at the end.