Balloon Loans

Balloon payment loans are loans which have an irregular final payment, with all other payments in the payment stream being equal. There are three general ways to compute a balloon loan: specify the regular payment, specify the final payment, or specify an amortization term greater than the balloon loan term.

Specifying the regular or final payment is self-explanatory. However, specifying an amortization term requires a bit more explanation. Each type of balloon loan is described below with an example of each.

Sample Request

The following example is a request for a balloon payment loan loan with a specified regular payment of $297.84, proceeds of $10,000, 12 monthly payments, with interest accruing on an actual day / 365 U. S. Rule basis at a rate of 4.5%.

{
  "Module" : "Balloon",
  "Data" : {
    "LoanDate" : "2022-08-22",
    "PmtDate" : "2022-10-01",
    "IntRate" : "4.500",
    "Proceeds" : "10000.00",
    "Term" : "12",
    "RegPmt" : "297.84",
    "Settings" : {
      "AccrualCode" : "320"
    }
  }
}

Note that in the above request, the RegPmt field is specified. This instructs the SCE to perform a balloon with specified regular payment calculation. The following loan is identical to the one above, except that we are specifying a desired final payment (FinalPmt) instead of a regular payment:

{
  "Module" : "Balloon",
  "Data" : {
    "LoanDate" : "2022-08-22",
    "PmtDate" : "2022-10-01",
    "IntRate" : "4.500",
    "Proceeds" : "10000.00",
    "Term" : "12",
    "FinalPmt" : "7121.15",
    "Settings" : {
      "AccrualCode" : "320"
    }
  }
}

Instead of specifying a regular or final payment and computing the other, you may request a regular payment computed that is equivalent to that of a longer term equal payment loan, with the final payment computed to amortize the balloon loan at the shorter term. These are often called specified amortization term balloons, or Canadian roll-over balloon loans. The following is a sample request for a balloon payment loan calculation, where the amortization term (AmortTerm) is specified:

{
  "Module" : "Balloon",
  "Data" : {
    "LoanDate" : "2022-08-22",
    "PmtDate" : "2022-10-01",
    "IntRate" : "4.500",
    "Proceeds" : "10000.00",
    "Term" : "12",
    "AmortTerm" : "36",
    "Settings" : {
      "AccrualCode" : "320"
    }
  }
}

Sample Response

{
  "Result" : 200,
  "Module" : "Balloon",
  "Data" : {
    "Errors" : [
    ],
    "Warnings" : [
    ],
    "Results" : {
      "Payment" : "297.84",
      "Final" : "7121.15"
    },
    "FedBox" : {
      "AmtFin" : "10000.00",
      "FinChg" : "397.39",
      "TotPmts" : "10397.39",
      "APR" : {
        "Value" : "4.495",
        "Type" : "Actuarial"
      }
    },
    "Moneys" : {
      "Principal" : "10000.00",
      "Interest" : "397.39"
    },
    "Accrual" : {
      "Method" : "Actual/365 US Rule",
      "Days1Pmt" : "40",
      "DayCount" : "Actual",
      "Maturity" : "2023-09-01"
    },
    "PmtStreams" : [
      {
        "Term" : "11",
        "Pmt" : "297.84",
        "Rate" : "4.500",
        "Begin" : "2022-10-01"
      },
      {
        "Term" : "1",
        "Pmt" : "7121.15",
        "Rate" : "4.500",
        "Begin" : "2023-09-01"
      }
    ],
    "AmTable" : {
      "GrandTotals" : {
        "PmtTot" : "10397.39",
        "IntTot" : "397.39",
        "PrinTot" : "10000.00"
      },
      "SubTotals" : [
        {
          "Year" : "2022",
          "Start" : "1",
          "Events" : "3",
          "PmtSub" : "893.52",
          "IntSub" : "121.69",
          "PrinSub" : "771.83"
        },
        {
          "Year" : "2023",
          "Start" : "4",
          "Events" : "9",
          "PmtSub" : "9503.87",
          "IntSub" : "275.70",
          "PrinSub" : "9228.17"
        }
      ],
      "AmLines" : [
        {
          "Idx" : "1",
          "Date" : "2022-10-01",
          "BegBal" : "10000.00",
          "Pmt" : "297.84",
          "Int" : "49.32",
          "Prin" : "248.52",
          "EndBal" : "9751.48"
        },
        ...,
        {
          "Idx" : "12",
          "Date" : "2023-09-01",
          "BegBal" : "7094.04",
          "Pmt" : "7121.15",
          "Int" : "27.11",
          "Prin" : "7094.04",
          "EndBal" : "0.00"
        }
      ]
    }
  }
}