Found a workaround for balloon payment calculations that saved me $4,200

I was stuck on a 5-year commercial loan for a property near Columbus with a balloon payment that kept throwing off my cash flow projections. My usual spreadsheet formulas weren't cutting it because the interest recalculation after the balloon was muddy. So I tried splitting the loan into two separate amortization schedules (one before the balloon, one after) and then linking them with a simple interest rollover. It finally lined up with my actual numbers and that $4,200 difference was just from avoiding a hidden prepayment penalty. Has anyone else had luck with this dual-schedule method or do you use a different trick for balloon loans?

2 comments

2 Comments

grace_allen12d ago

Wait is this kinda like how people split up their monthly bills into two separate bank accounts to avoid overdraft fees? Idk maybe it's just me but it seems like breaking things into smaller chunks makes the hidden stuff way easier to spot.

nguyen.tara12d ago

Three bank accounts feels like overkill just to avoid a $35 fee @grace_allen.