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Commercial Loan Calculator
Model a commercial loan where the amortization period can be longer than the balloon term.
Commercial Loan Calculator
Enter your numbers and the result updates straight away.
Outputs
Planning estimate only. Verify assumptions before making a financial decision.
A loan amortized over 20 years but due after 5 years retains a substantial balloon balance that must be refinanced or repaid.
How this calculation works
Monthly payment is calculated over the stated amortization period, while the unpaid principal is measured at the earlier balloon date. The balloon equals original principal grown by monthly interest less the accumulated principal effect of scheduled payments. The model assumes a fixed rate and no fees or prepayments.
How to interpret the result
A long amortization with a short maturity reduces current payment but leaves refinancing exposure. Evaluate the balloon against projected property or business value, stabilized cash flow, future interest rates, lender covenants, and the possibility that refinancing is unavailable.
Limitations
Results are educational planning estimates. They do not include every tax, legal, accounting, financing, or business-specific consideration and are not professional advice.
Sources and further reading
Formula and example
A loan amortized over 20 years but due after 5 years retains a substantial balloon balance that must be refinanced or repaid.
Common use cases
- Model loans with different amortization and maturity periods.
- Estimate balloon principal at refinance.
- Compare payment relief with refinance exposure.
- Carry annual debt service into DSCR.
- Stress higher refinance rates.
Commercial Loan Calculator FAQ
Why is the balloon balance still large?
Payments are calculated over the longer amortization period, while the unpaid balance becomes due at the earlier balloon date.
What should I test before accepting a balloon loan?
Test higher refinance rates, lower business cash flow, and the possibility that refinancing is unavailable.
How is Commercial Loan calculated?
Payments are calculated using the amortization term; remaining balance is calculated after the selected balloon period.
How should I interpret the result?
Treat the balloon balance as a future liquidity and refinancing risk, not merely a lower-payment benefit.
Why are amortization and maturity different?
Payments may be calculated as if the loan runs for a longer period, while the legal maturity requires the remaining balance sooner. That unpaid principal becomes the balloon.
Does the balloon include fees or a prepayment penalty?
No. It is scheduled principal only. Review the loan documents for exit fees, yield maintenance, defeasance, or prepayment provisions.
What should be stressed in a refinance case?
Test lower NOI or operating cash flow, lower collateral value, higher rates, tighter DSCR or LTV requirements, and additional lender fees.