Partially Amortized Loan Calculator
Partially Amortized Loan Calculator - Calculate monthly payments, total payments, and balloon payment.
What is a Partially Amortized Loan?
A partially amortized loan is a type of loan where the borrower makes regular payments of both principal and interest, but the loan does not fully amortize over the term. This means that at the end of the loan term, there is a remaining balance, known as the balloon payment, that must be paid in full. This type of loan is often used in commercial real estate and other large-scale financing scenarios.
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Results
| Monthly Payment | Total Paid During Payment Period | Balloon Payment | Total Payment |
|---|---|---|---|
Formula
Formula
The formula for a partially amortized loan calculation involves two main parts:
1. Monthly Payment:
M = P × (r × (1 + r)^n) / ((1 + r)^n - 1)
Where:
M = Monthly payment
P = Loan principal
r = Monthly interest rate
n = Number of payments
2. Balloon Payment:
B = P × (1 + r)^n - (M × ((1 + r)^n - 1) / r)
Where:
B = Balloon payment
P = Loan principal
M = Monthly payment
r = Monthly interest rate
n = Number of payments
FAQ
What is a balloon payment?
A balloon payment is a large final payment due at the end of a partially amortized loan. It represents the remaining balance that hasn't been paid off through regular installments. This amount can be substantial, depending on the loan terms and payment schedule.
How do I calculate the monthly payment?
To calculate the monthly payment, use the formula provided, which accounts for the principal amount, interest rate, and the number of payments. This ensures you cover both principal and interest throughout the loan period.
Can I adjust the payment period?
Yes, you can adjust the payment period based on your financial situation. Shorter periods result in higher monthly payments but lower total interest paid. Conversely, longer periods mean lower monthly payments but more interest over the life of the loan.
What happens if I miss a payment?
Missing a payment can lead to late fees, increased interest rates, and potential damage to your credit score. It's important to communicate with your lender and seek possible solutions if you're struggling to make payments.
How often should I check my loan balance?
Regularly reviewing your loan balance helps you stay informed about your financial situation and progress. Checking quarterly or after major payments can help ensure you are on track and address any discrepancies promptly.