Key Takeaway
A balloon loan has low regular EMIs with a large lump-sum payment at maturity. On a ₹10 lakh loan with ₹3 lakh balloon, monthly EMI drops from ₹20,758 to ₹16,375 , but requires ₹3 lakh cash at the end.
Balloon Payment Calculator
Calculate EMIs for loans structured with lower monthly payments and a final lump sum.
Loan Output
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Frequently Asked Questions
What is a balloon payment in a loan?
A balloon loan requires smaller monthly payments (often interest-only) for a fixed period, followed by a massive final payment (the 'balloon' payment) that pays off the entire remaining principal.
Are balloon mortgages common in India?
No, they are highly uncommon for retail home loans in India. They are occasionally used in commercial financing or specific developer subvention schemes.
What is the risk of a balloon loan?
The massive refinancing risk. If you cannot afford the huge final lump sum payment and cannot secure a new loan to refinance it, the bank will foreclose on the property.
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