A Balloon Payment Calculator is a financial tool designed for loan and mortgage agreements. It calculates the large, final payment, known as the ‘balloon payment’, after a series of regular, typically smaller payments have been made. In certain loans, while monthly payments might be based on a long-term amortization schedule, the actual loan term might be much shorter, say 5 or 7 years. At the term’s end, rather than the loan being settled, a significant sum—the balloon payment—remains. This calculator helps borrowers gauge this balloon payment, taking into account the loan amount, interest rate, and loan duration. By estimating this final sum, borrowers can make well-informed decisions, understanding their future financial obligations. It’s crucial to utilize this tool before agreeing to any balloon-payment loan to be fully aware of the impending financial commitments.