Balloon Payment Car Loan Calculator
See how a balloon (residual) payment lowers your monthly car loan repayments — and what it costs you in extra interest — for any Australian loan amount, rate and term.
A balloon payment (also called a residual) is a lump sum you defer to the end of your loan. It lowers your monthly repayments, but you still owe — and pay interest on — that amount until the term ends.
How a balloon payment works
With a balloon (residual) car loan, part of the amount borrowed is set aside as a lump sum due at the end of the term. Because you only pay down the rest of the balance in your monthly repayments, those repayments are smaller — but the deferred amount keeps accruing interest, so a balloon loan usually costs more in total interest than an equivalent loan with no balloon. Use our car loan repayment calculator to compare a standard loan, or the early payoff calculator to see how extra repayments change the picture.
Your options when the balloon is due
- Pay it out in cash to own the vehicle outright.
- Refinance the balloon into a new loan and keep making repayments.
- Trade in or sell the vehicle and use the proceeds to clear the residual.
Frequently asked questions
What is a typical balloon payment on a car loan in Australia?
Balloon amounts commonly range from about 20% to 50% of the amount financed, and lenders often cap the residual based on the loan term (a longer term usually means a lower maximum balloon).
Does a balloon payment reduce the total cost of my loan?
No. It lowers your monthly repayment but generally increases total interest, because the deferred balloon amount accrues interest for the whole term.
Can I pay a balloon loan off early?
Usually yes, though some lenders charge early termination or break fees. Check your contract, and estimate the impact with our early payoff calculator.
Are balloon payments common for business vehicles?
Yes. Balloons are frequently used with commercial finance such as a chattel mortgage, where they help manage cash flow. Speak to your accountant about any GST or tax treatment for business use.
Is a novated lease different from a balloon loan?
Yes — a novated lease also has a residual, but it's a salary-packaging arrangement with different tax treatment. See our guide to a novated lease vs a traditional car loan.
This calculator provides estimates for general information only and is not financial advice. Your lender's quoted repayments and residual may differ. Consider seeking advice for your circumstances.