Car Loan Balloon Payment Calculator

This calculator works out your car loan repayments when the loan includes a balloon payment, sometimes called a residual, and shows you exactly what that balloon costs. A balloon is a large lump sum that is parked at the end of the loan term rather than paid off along the way. Because part of the loan is deferred to the end, your monthly repayments drop, which is why dealers and lenders often promote balloon finance to make a car look more affordable. The catch is that you keep paying interest on the deferred amount for the whole term, and the balloon is still due in full when the term ends, so a balloon almost always increases the total amount you pay. This tool makes the trade-off clear. You enter the vehicle price, your deposit, the interest rate, the loan term, and the balloon amount you are considering, and it returns your monthly repayment, the balloon due at the end, the total interest, and the total cost over the life of the loan. Crucially, it also shows what the monthly repayment and total interest would be on a standard loan with no balloon, so you can see in dollars how much lower the monthly payment is and how much extra interest you pay for that convenience. A sensible rule of thumb is to keep the balloon below what you expect the car to be worth at the end of the term, so you can clear it by selling or trading the vehicle rather than being caught with negative equity. Figures are an estimate for comparison; your lender's quote and fees will be the final word.

Total cost includes your deposit, all repayments and the balloon. A balloon lowers monthly payments but raises total interest. An estimate; lender fees not included.