Lease Balloon Payment Calculator
Calculate the monthly payment on a car loan or lease that finishes with a balloon (residual) — the lump sum still owing at the end. Enter the amount financed, the interest rate, the term and the balloon to see the payment and what you pay in total.
Enter Values
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How to use this calculator
- Enter the amount financed (the loan/lease principal after any deposit or trade-in).
- Enter the annual interest rate and the term in months.
- Enter the balloon/residual owing at the end (leave blank or 0 for a normal fully-amortising loan), then read the monthly payment and totals.
How it works
The monthly rate is the annual rate divided by 12. The balloon is discounted back to today and subtracted from the principal, and the remainder is amortised over the term: payment = (P − B/(1+i)^n) × i / (1 − (1+i)^−n), where P is the amount financed, i the monthly rate, n the term in months and B the balloon. At 0% interest the payment is simply (P − B) / n. Total of payments = payment × months, total cost = that plus the balloon, and total interest = total cost − amount financed.
Worked example
Worked example. Financing $40,000 at 7.5% p.a. over 48 months with a $15,000 balloon: i = 0.00625, (1.00625)^48 ≈ 1.348866, giving a payment of about $698.22 a month. Over the term that is $33,514.68 in payments plus the $15,000 balloon = $48,514.68 total, of which $8,514.68 is interest.
Common mistakes
- Forgetting the balloon still has to be paid — a lower monthly payment leaves a large lump sum to refinance, pay out or cover by selling the car.
- Ignoring fees — establishment, monthly account and other charges are not in this figure and will raise the real cost.
- Entering a balloon equal to or above the amount financed, which means nothing is actually being repaid.
Frequently asked questions
Does a balloon save me money?
It lowers each monthly payment, but because you owe more for longer it usually increases total interest, and you still have to deal with the balloon at the end. It improves cash flow, not total cost.
What happens to the balloon at the end of the term?
You typically pay it out in cash, refinance it into a new loan, or sell/trade the vehicle to cover it. Confirm the exact options and any fees with your financier before signing.
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Tip: Enter any known values to calculate the remaining results.
All calculations run in your browser. Your inputs are never saved or transmitted.