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"
        }
      ]
    }
  }
}