Sorry, this is kind of a goofy one! I'm not sure how I can explain it to make it understandable.
You can solve for either the Monthly Payment and Balloon Payment or the Balloon Payment Only.
When you solve for the Monthly & Balloon payments, fill in the first three fields only. The payment is based on a 30 year loan.
When you solve for the Balloon Only payment, fill in the first four fields. You can make the payment whatever you want. Therefore, it acts like a payoff calculator.
Study the examples below. I think they will make it a bit more clear.
- You are getting a $150,000 mortgage loan with a 3 year fixed interest rate of 4.5%. After that the rate can change. You want to know what your monthly payment will be for the first 3 years and how much you'll still owe after that. Enter:
- 150,000 for Principal Value
- 36 for Months
- 4.5 for Interest Rate
- Press the Monthly & Balloon button and you will see that your payment would be $760.03 and that you'll still owe $142,401.80 on the loan.
- Using the example above, let's say you want to make an extra principal payment each month. Instead of paying $760.03 per month, you're going to pay $1000 per month. Now how much will you owe after 36 months of payments? Enter:
- Leave everything the same, just change the Payment to 1000
- Press the Balloon Only button and you will see that you'll owe $133,171.07 on the loan, instead of $142,401.80.
- A friend gave you a $10,000 loan at 5% interest. It is expected to be paid back within 5 years. You have been making monthly payments of $200.00 (instead of the $188.71 calculated payment) for 17 months. Now you have a little extra money and would like to pay your friend back the entire amount owed. Enter:
- 10,000 for Principal Value
- 17 for Months
- 5 for Interest Rate
- 200 for Payment
- Press the Balloon Only button and you will see that you can pay your friend back with $7,216.72 (plus any daily interest on that amount that has accrued since the last payment).
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