Balloon Payment Schedule

Here is an example of a finance agreement which is structured to include a balloon payment. 

Under a Personal Contract Purchase (PCP) agreement an optional balloon payment is referred to as the vehicles Guaranteed Minimum Future Value (GMFV).




Less:Balloon or GMFV:


= £6,000
+(Interest on £10,000)£1,884
=Balance for monthly payments£7,884
Divided by Term (36 Months/3 Years)Monthly payments£219
Administration Fee£100 included with 1st payment 
Option to Purchase Fee£100 included with balloon/GMFV 



Payment Schedule

Here is the payment schedule for the PCP with a balloon payment (known as the GMFV).


21st payment (£219 + £100)£319
335 payments£219
4Balloon/GMFV + £100£4,100
5Total amount to be paid including interest£14,584