Balloon Payment Loans
Balloon loans are loans which have a large final payment because of a regular payment less than the corresponding equal payment stream. 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.
Balloon Loan, Specified Regular Payment
Specifying a regular payment allows the SCE to compute a final payment that amortizes the loan appropriately.
Sample Request
The following is a sample request for a balloon payment loan calculation where the regular periodic payment is fixed at $500. The final balloon payment will be computed.
<inBALLOON_SPECIFY_REGULAR AccrualCode="320">
<LoanDate>2023-12-01</LoanDate>
<PmtDate>2024-01-01</PmtDate>
<IntRate>10</IntRate>
<Proceeds>10000.00</Proceeds>
<Term>12</Term>
<RegPmt>500</RegPmt>
</inBALLOON_SPECIFY_REGULAR>
Sample Response
The following is the XML response associated with the roll to amount request above, at the time this documentation was being written (2024-10):
<?xml version="1.0" standalone="no" ?>
<!DOCTYPE outBALLOON_SPECIFY_REGULAR SYSTEM "outBALLOON_SPECIFY_REGULAR.dtd">
<outBALLOON_SPECIFY_REGULAR>
<Results>
<Description>Successful Calculation</Description>
<Payment>500.00</Payment>
<Final>5266.70</Final>
</Results>
<FedBox>
<AmtFin>10000.00</AmtFin>
<FinChg>766.70</FinChg>
<TotPmts>10766.70</TotPmts>
<RegZAPR Type="Actuarial">10.029</RegZAPR>
</FedBox>
<Moneys>
<Principal>10000.00</Principal>
<Interest>766.70</Interest>
<Protection Category="None" PerPmt="0.00" PerDay="0.00">0.00</Protection>
</Moneys>
<Accrual>
<Method>Actual/365 US Rule</Method>
<Days1Pmt DayCount="Actual">31</Days1Pmt>
<Maturity>2024-12-01</Maturity>
</Accrual>
<PmtStream Term="11" Pmt="500.00" Rate="10.000" Begin="2024-01-01"/>
<PmtStream Term="1" Pmt="5266.70" Rate="10.000" Begin="2024-12-01"/>
<AmTable>
<GrandTotals PmtTot="10766.70" IntTot="766.70" PrinTot="10000.00"/>
<SubTotals Year="2024" Start="1" Events="12" PmtSub="10766.70" IntSub="766.70" PrinSub="10000.00"/>
<AmLine Idx="1" Date="2024-01-01" BegBal="10000.00" Pmt="500.00" Int="84.93" Prin="415.07" EndBal="9584.93"/>
<AmLine Idx="2" Date="2024-02-01" BegBal="9584.93" Pmt="500.00" Int="81.41" Prin="418.59" EndBal="9166.34"/>
<AmLine Idx="3" Date="2024-03-01" BegBal="9166.34" Pmt="500.00" Int="72.83" Prin="427.17" EndBal="8739.17"/>
<AmLine Idx="4" Date="2024-04-01" BegBal="8739.17" Pmt="500.00" Int="74.22" Prin="425.78" EndBal="8313.39"/>
<AmLine Idx="5" Date="2024-05-01" BegBal="8313.39" Pmt="500.00" Int="68.33" Prin="431.67" EndBal="7881.72"/>
<AmLine Idx="6" Date="2024-06-01" BegBal="7881.72" Pmt="500.00" Int="66.94" Prin="433.06" EndBal="7448.66"/>
<AmLine Idx="7" Date="2024-07-01" BegBal="7448.66" Pmt="500.00" Int="61.22" Prin="438.78" EndBal="7009.88"/>
<AmLine Idx="8" Date="2024-08-01" BegBal="7009.88" Pmt="500.00" Int="59.54" Prin="440.46" EndBal="6569.42"/>
<AmLine Idx="9" Date="2024-09-01" BegBal="6569.42" Pmt="500.00" Int="55.80" Prin="444.20" EndBal="6125.22"/>
<AmLine Idx="10" Date="2024-10-01" BegBal="6125.22" Pmt="500.00" Int="50.34" Prin="449.66" EndBal="5675.56"/>
<AmLine Idx="11" Date="2024-11-01" BegBal="5675.56" Pmt="500.00" Int="48.20" Prin="451.80" EndBal="5223.76"/>
<AmLine Idx="12" Date="2024-12-01" BegBal="5223.76" Pmt="5266.70" Int="42.94" Prin="5223.76" EndBal="0.00"/>
</AmTable>
</outBALLOON_SPECIFY_REGULAR>
Balloon Loan, Specified Final Payment
Instead of specifying a regular payment and trying to compute a final payment, a borrower may request to specify the final payment. The SCE will then compute a regular payment, so long as the specified final payment is valid.
Sample Request
<inBALLOON_SPECIFY_FINAL AccrualCode="320">
<LoanDate>2023-12-01</LoanDate>
<PmtDate>2024-01-01</PmtDate>
<IntRate>10</IntRate>
<Proceeds>10000.00</Proceeds>
<Term>12</Term>
<FinalPmt>5000.00</FinalPmt>
</inBALLOON_SPECIFY_FINAL>
Sample Response
The following is the response associated with the request above, at the time this documentation was being written (2024-10):
<?xml version="1.0" standalone="no" ?>
<!DOCTYPE outBALLOON_SPECIFY_FINAL SYSTEM "outBALLOON_SPECIFY_FINAL.dtd">
<outBALLOON_SPECIFY_FINAL>
<Results>
<Description>Successful Calculation</Description>
<Payment>523.06</Payment>
<Final>5000.00</Final>
</Results>
<FedBox>
<AmtFin>10000.00</AmtFin>
<FinChg>753.66</FinChg>
<TotPmts>10753.66</TotPmts>
<RegZAPR Type="Actuarial">10.030</RegZAPR>
</FedBox>
<Moneys>
<Principal>10000.00</Principal>
<Interest>753.66</Interest>
<Protection Category="None" PerPmt="0.00" PerDay="0.00">0.00</Protection>
</Moneys>
<Accrual>
<Method>Actual/365 US Rule</Method>
<Days1Pmt DayCount="Actual">31</Days1Pmt>
<Maturity>2024-12-01</Maturity>
</Accrual>
<PmtStream Term="11" Pmt="523.06" Rate="10.000" Begin="2024-01-01"/>
<PmtStream Term="1" Pmt="5000.00" Rate="10.000" Begin="2024-12-01"/>
<AmTable>
<GrandTotals PmtTot="10753.66" IntTot="753.61" PrinTot="10000.05"/>
<SubTotals Year="2024" Start="1" Events="12" PmtSub="10753.66" IntSub="753.61" PrinSub="10000.05"/>
<AmLine Idx="1" Date="2024-01-01" BegBal="10000.00" Pmt="523.06" Int="84.93" Prin="438.13" EndBal="9561.87"/>
<AmLine Idx="2" Date="2024-02-01" BegBal="9561.87" Pmt="523.06" Int="81.21" Prin="441.85" EndBal="9120.02"/>
<AmLine Idx="3" Date="2024-03-01" BegBal="9120.02" Pmt="523.06" Int="72.46" Prin="450.60" EndBal="8669.42"/>
<AmLine Idx="4" Date="2024-04-01" BegBal="8669.42" Pmt="523.06" Int="73.63" Prin="449.43" EndBal="8219.99"/>
<AmLine Idx="5" Date="2024-05-01" BegBal="8219.99" Pmt="523.06" Int="67.56" Prin="455.50" EndBal="7764.49"/>
<AmLine Idx="6" Date="2024-06-01" BegBal="7764.49" Pmt="523.06" Int="65.94" Prin="457.12" EndBal="7307.37"/>
<AmLine Idx="7" Date="2024-07-01" BegBal="7307.37" Pmt="523.06" Int="60.06" Prin="463.00" EndBal="6844.37"/>
<AmLine Idx="8" Date="2024-08-01" BegBal="6844.37" Pmt="523.06" Int="58.13" Prin="464.93" EndBal="6379.44"/>
<AmLine Idx="9" Date="2024-09-01" BegBal="6379.44" Pmt="523.06" Int="54.18" Prin="468.88" EndBal="5910.56"/>
<AmLine Idx="10" Date="2024-10-01" BegBal="5910.56" Pmt="523.06" Int="48.58" Prin="474.48" EndBal="5436.08"/>
<AmLine Idx="11" Date="2024-11-01" BegBal="5436.08" Pmt="523.06" Int="46.17" Prin="476.89" EndBal="4959.19"/>
<AmLine Idx="12" Date="2024-12-01" BegBal="4959.19" Pmt="5000.00" Int="40.76" Prin="4959.24" EndBal="-0.05"/>
</AmTable>
</outBALLOON_SPECIFY_FINAL>
Balloon Loan, Specified Amortization Term
Instead of specifying a regular or final payment and computing the other, a borrower may request to have a regular payment 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, Canadian roll-over balloon loans, or loans with a long term amortization and short term call.
Sample Request
The following is a sample request for an balloon loan calculation with a term of 12 months and a long term amortization of 120 months.
<inBALLOON_SPECIFY_AMORT AccrualCode="310">
<LoanDate>2023-12-01</LoanDate>
<PmtDate>2024-01-01</PmtDate>
<IntRate>10</IntRate>
<Proceeds>10000.00</Proceeds>
<Term>12</Term>
<AmortTerm>120</AmortTerm>
</inBALLOON_SPECIFY_AMORT>
Sample Response
The following is the response associated with the the request above, at the time this documentation was being written (2024-10):
<?xml version="1.0" standalone="no" ?>
<!DOCTYPE outBALLOON_SPECIFY_AMORT SYSTEM "outBALLOON_SPECIFY_AMORT.dtd">
<outBALLOON_SPECIFY_AMORT>
<Results>
<Description>Successful Calculation</Description>
<Payment>132.97</Payment>
<Final>9526.28</Final>
</Results>
<FedBox>
<AmtFin>10000.00</AmtFin>
<FinChg>988.95</FinChg>
<TotPmts>10988.95</TotPmts>
<RegZAPR Type="Actuarial">10.167</RegZAPR>
</FedBox>
<Moneys>
<Principal>10000.00</Principal>
<Interest>988.95</Interest>
<Protection Category="None" PerPmt="0.00" PerDay="0.00">0.00</Protection>
</Moneys>
<Accrual>
<Method>Actual/360 US Rule</Method>
<Days1Pmt DayCount="Actual">31</Days1Pmt>
<Maturity>2024-12-01</Maturity>
</Accrual>
<PmtStream Term="11" Pmt="132.97" Rate="10.000" Begin="2024-01-01"/>
<PmtStream Term="1" Pmt="9526.28" Rate="10.000" Begin="2024-12-01"/>
<AmTable>
<GrandTotals PmtTot="10988.95" IntTot="988.95" PrinTot="10000.00"/>
<SubTotals Year="2024" Start="1" Events="12" PmtSub="10988.95" IntSub="988.95" PrinSub="10000.00"/>
<AmLine Idx="1" Date="2024-01-01" BegBal="10000.00" Pmt="132.97" Int="86.11" Prin="46.86" EndBal="9953.14"/>
<AmLine Idx="2" Date="2024-02-01" BegBal="9953.14" Pmt="132.97" Int="85.71" Prin="47.26" EndBal="9905.88"/>
<AmLine Idx="3" Date="2024-03-01" BegBal="9905.88" Pmt="132.97" Int="79.80" Prin="53.17" EndBal="9852.71"/>
<AmLine Idx="4" Date="2024-04-01" BegBal="9852.71" Pmt="132.97" Int="84.84" Prin="48.13" EndBal="9804.58"/>
<AmLine Idx="5" Date="2024-05-01" BegBal="9804.58" Pmt="132.97" Int="81.70" Prin="51.27" EndBal="9753.31"/>
<AmLine Idx="6" Date="2024-06-01" BegBal="9753.31" Pmt="132.97" Int="83.99" Prin="48.98" EndBal="9704.33"/>
<AmLine Idx="7" Date="2024-07-01" BegBal="9704.33" Pmt="132.97" Int="80.87" Prin="52.10" EndBal="9652.23"/>
<AmLine Idx="8" Date="2024-08-01" BegBal="9652.23" Pmt="132.97" Int="83.12" Prin="49.85" EndBal="9602.38"/>
<AmLine Idx="9" Date="2024-09-01" BegBal="9602.38" Pmt="132.97" Int="82.69" Prin="50.28" EndBal="9552.10"/>
<AmLine Idx="10" Date="2024-10-01" BegBal="9552.10" Pmt="132.97" Int="79.60" Prin="53.37" EndBal="9498.73"/>
<AmLine Idx="11" Date="2024-11-01" BegBal="9498.73" Pmt="132.97" Int="81.79" Prin="51.18" EndBal="9447.55"/>
<AmLine Idx="12" Date="2024-12-01" BegBal="9447.55" Pmt="9526.28" Int="78.73" Prin="9447.55" EndBal="0.00"/>
</AmTable>
</outBALLOON_SPECIFY_AMORT>