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Balloon payment calculator

Monthly payments, total cost and APR when part of what you borrow is paid in one lump sum at the end.

Balloon payment calculator

Kind of agreement

With hire purchase or PCP you may hand the goods back once you have paid half the total amount payable.

The amount of credit, after any deposit.

£

From the start to the final payment: 48 for 47 monthly payments followed by the balloon.

Rate on the quote

The fixed interest rate on the agreement, or its APR. A flat rate is neither: use the APR instead.

%
Balloon given

0% for no balloon, 100% for an interest-only loan.

%
The balloon is paid

A 48-month quote with 47 monthly payments and then a final payment: 'Instead'. An interest-only loan: 'On top'.

Only used for the half-way figure: what you paid at the start counts towards the half.

£

Monthly payment

—

Enter the amount, length, rate and balloon to see the monthly payment.

Number of monthly payments
—
Balloon
—
Interest
—
Total cost of credit
—
APR
—
Total repaid, fees included
—

Recent calculations

Nothing yet: copy, export or save a calculation to find it here.

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See all 14 apps in Loans and credit

How it works

With a balloon, part of what you borrow is not repaid month by month but in one lump sum at the end. The monthly payments are lower, but you pay interest on the balloon for the whole term. Enter the amount, length, rate and balloon to see the monthly payment, the total cost and the APR, what the same loan would cost with no balloon and, for hire purchase or PCP, when your payments reach half the total amount payable, the point from which you can hand the goods back without paying more towards the half.

Choose the kind of agreement

Choose hire purchase or PCP when the goods only become yours once the final payment is made: the calculator then shows half the total amount payable, the figure that matters if you end the agreement early. Choose loan for a personal or business loan or a mortgage, where that right does not apply.

Enter the rate from your quote

Choose APR if you are copying the APR from a quote: it already includes the fees you must pay. Choose interest rate for the yearly rate charged on what you owe; you can then add any fees paid at the start and the calculator works out the APR. With the interest rate, the monthly rate is the yearly rate divided by 12: a £130,000 repayment mortgage over 25 years at 2.5% comes to £583.20 a month, the £583 of the Bank of England’s example. A flat rate is calculated differently and is neither of these: if your quote shows one, enter its APR instead.

Describe the balloon

Enter it as a percentage of the amount borrowed or as an amount. Choose 'Instead' if the quote lists, say, 47 monthly payments and then a final payment over 48 months. Choose 'On top' if the balloon is paid with the last monthly payment, as on an interest-only loan, where it is the whole amount borrowed (100%).

Read the result

The monthly payment is rounded to the nearest penny, with halves rounded up, and the last monthly payment takes up the rounding difference so the loan is repaid exactly. 'Extra interest due to the balloon' shows what the lower payments cost. Copy the workings, export them as a CSV file or save them to Priostack.

Monthly rate: i = interest rate ÷ 12, or i = (1 + APR)^(1/12) − 1.

Balloon on top of the last payment (n monthly payments): M = (C × (1 + i)^n − B) × i ÷ ((1 + i)^n − 1).

Balloon instead of the last payment (n − 1 monthly payments, then the balloon in month n): M = (C × (1 + i)^n − B) × i ÷ ((1 + i) × ((1 + i)^(n − 1) − 1)).

At 0%: M = (C − B) ÷ the number of monthly payments. C is the amount borrowed, B the balloon and n the length in months.

APR: the yearly rate X at which the payments, discounted at (1 + X)^(k/12) for month k, add up to the amount borrowed less the fees paid at the start.

Example: a £25,000 PCP over 48 months

After a £3,000 deposit you borrow £25,000 at 9.9% APR, with a final payment of £11,000 after 47 monthly payments. The monthly rate is 1.099^(1/12) − 1 = 0.78977%, so each payment is £446.13 (the last one £445.97). Interest comes to £6,967.95 and you repay £31,967.95 in all. With no balloon the payment would be £627.81 a month and the interest £1,833.22 less. With the deposit, the total amount payable is £34,967.95, so the half-way figure is £17,483.98: your deposit and payments reach it with payment 33.

Frequently asked questions

What is a balloon payment?

A large final payment that clears what is left of the loan. Because part of the amount borrowed is held back until the end, the monthly payments are lower. The balloon still has to be paid when it falls due, from savings, with new finance or by selling what it paid for, unless the agreement lets you return the goods instead.

Why does a balloon cost more in interest?

Because the balloon stays outstanding for the whole term and is charged interest every month. In the example above, the £11,000 balloon cuts the monthly payment by £181.68 but adds £1,833.22 of interest. With no fees, the APR does not change: the total cost goes up because you stay in debt for longer.

Can I hand the car back before the end?

If your agreement is a regulated hire purchase or conditional sale agreement, yes: you can end it at any time before the final payment falls due by telling the lender (Consumer Credit Act 1974, section 99). You then owe whatever brings what you have paid up to half the total amount payable, unless the agreement asks for less, and more if you have not taken reasonable care of the goods (section 100). Arrears already due are still owed. The total includes the deposit, the fees and the final payment, so a large balloon pushes the half-way point late into the agreement, sometimes beyond the last monthly payment. If you entered the APR, the calculator cannot see the fees, such as an option-to-purchase fee: check the total amount payable on your agreement.

Does that apply to a personal loan?

No. Voluntary termination is a right under hire purchase and conditional sale agreements (section 99), not under loans: with a loan the car is yours from the start and the loan stands on its own. Choose 'Loan' and the calculator does not show the half-way figure.

Why does my quote differ by a few pence?

Lenders can round differently or adjust the first or last payment. This calculator rounds the monthly payment once and lets the last one take up the difference. If you entered the interest rate and there are fees, try the APR from the quote too: the two can give slightly different payments.

Does it work in Scotland, Wales and Northern Ireland?

Yes. The Consumer Credit Act 1974, including sections 99 and 100, applies across the United Kingdom, and the payment and APR formulas are the same everywhere.

Sources

  1. legislation.gov.uk: Consumer Credit Act 1974, section 99 (right to terminate hire purchase and conditional sale agreements) (8 November 2026)
  2. legislation.gov.uk: Consumer Credit Act 1974, section 100 (liability on termination: one-half of the total price) (11 November 2026)
  3. legislation.gov.uk: Consumer Credit Act 1974, section 189 ("total price" includes any sum payable on exercising an option to purchase) (9 November 2026)
  4. legislation.gov.uk: Consumer Credit (Total Charge for Credit) Regulations 2010, Schedule (the APR equation, a year of 12 equal months, at least one decimal place), version of 26 July 2013, superseded on 1 April 2014 (26 July 2013)
  5. FCA research note “Navigating the disclosure trade-off” (APR calculated by the method in CONC App 1.2 of the FCA Handbook) (29 April 2026)
  6. Bank of England: What are interest rates? (a £130,000 mortgage over 25 years: £583 a month at 2.5%, £651 at 3.5%) (5 November 2026)

This calculator gives general information, not legal, tax, financial or accounting advice. Your credit agreement sets the actual payments, APR and termination terms: check them before you sign.

Last reviewed: