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