You can create a new loan product with the balloon repayment schedule. To do that, follow two steps:
Create new loan product:
Go to Loans > Products > Loan products.
Click on Add new product.
Fill in the balloon loan product parameters:
Schedule*
List
Select the loan schedule type:
BALLOON,
BALLOON_ADJUSTED.
Schedule re-generation rule*
List
Select which type of rule is followed for the repayment schedule if the contract is changed. Possible values:
FIXED_LENGTH - during schedule re-generation, the system keeps the schedule length the same as in the original loan contract.
FIXED_PAYMENT_LENGTH - during schedule re-generation, the system keeps the instalments and length the same as in the original loan contract. The difference between the amounts after re-generation is assigned to the last payment in the loan repayment schedule.
Loan amortisation period as number of months*
Number
If the schedule = BALLOON, enter the min, max boundaries, and the default values of the amortisation period as number of months. Note: actual amortisation and commitment periods can be set when creating a .
You can find information about the other loan product parameters in the .
Here you will find instructions on creating a loan product with a balloon schedule.
A balloon loan is a loan with low monthly payments, followed by a large final payment to repay the remaining balance at the end of the term.
There are two periods used to calculate the balloon schedule:
Amortisation period - a longer period for calculating a monthly repayment amount based on classical annuity logic.
Committed or commitment period - an actual (shorter) repayment period to calculate the final payment and set the full balloon schedule.
The balloon schedule is offered in two formats:
Balloon - the payments occur on an agreed payment day.
Balloon adjusted - if the payment day falls on a holiday, the repayment is postponed until the next working day.
In this example, we will show a calculated schedule for a balloon loan with 100 months (8.3 years) amortisation period and a 1 year commitment period.
A bank issues a business loan for 8.3 years (amortisation period), and monthly payment is calculated based on the given period. At the same time, the bank leaves the right to decide after the initial 1 year (commitment period) if to continue with the loan or ask the customer to repay. Therefore, the monthly payment is calculated based on the amortisation period. However, the schedule payments are calculated until the end of the commitment period, which leaves a large balloon payment at the end of it.
For calculation, we will use the following loan data:
Requested amount: 10000 GBR
Amortisation period: 100 months
Commitment period: 12 months
Interest rate: 5%
Monthly payment amount: 130.83 GBR
Administration fee payment: 8.5 GBR
Below you will find an example of a calculated balloon schedule:
Date
Start balance
Principal payment
Interest payment
Administration fee payment
Total payment
End balance
Oct 2024
10,000.00
93.16
29.17
8.5
130.83
9,906.84
Nov 2024
9,906.84
81.05
41.28
8.5
130.83
9,825.79
Dec 2024
9,825.79
81.39
40.94
8.5
130.83
9,744.40
Jan 2025
9,744.40
81.73
40.60
8.5
130.83
9,662.67
Feb 2025
9,662.67
82.07
40.26
8.5
130.83
9,580.60
Mar 2025
9,580.60
82.41
39.92
8.5
130.83
9,498.19
Apr 2025
9,498.19
82.75
39.58
8.5
130.83
9,415.44
May 2025
9,415.44
83.10
39.23
8.5
130.83
9,332.34
Jun 2025
9,332.34
83.45
38.88
8.5
130.83
9,248.89
Jul 2025
9,248.89
83.79
38.54
8.5
130.83
9,165.10
Aug 2025
9,165.10
84.14
38.19
8.5
130.83
9,080.96
Sep 2025
9,080.96
9,080.96
37.84
8.5
9,127.30
0.00
Total
10,000.00
464.43
102.00
10,566.43
