04 Evaluate borrowing
Business loan payment calculator
Enter the loan amount, the annual interest rate and the term. See the monthly payment, the interest over the life of the loan and how the balance falls.
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It runs in your browser, and JavaScript is turned off or blocked here. Turn it on to use the calculator, or work it out by hand with the formula and worked example below.
Your result
Enter the loan amount, annual interest rate and term.
You will see
- Monthly payment
- Total interest and total repaid
- How the balance falls, year by year
Your figures stay in this browser tab. Nothing is saved or sent.
What to enter
- Loan amount
- The amount you borrow.
- Annual interest rate
- The yearly interest rate on the loan. Enter 0 for an interest-free loan.
- Term
- How long you have to repay, in years or months, up to 40 years. The calculator assumes one payment a month.
- Upfront fees
- Optional. Fees you pay to take the loan, such as an origination or closing fee, if you know them. They are added to the total cost; the monthly payment does not change.
How it is calculated
- Monthly rate (r)
- Annual interest rate ÷ 12
- Monthly payment
- Loan amount × r ÷ (1 − (1 + r)^−n), where n is the number of monthly payments
- Monthly payment at 0%
- Loan amount ÷ n
- Total interest
- All payments added together − Loan amount
- Total cost of borrowing
- Total interest + Upfront fees you enter
This shows a fixed-rate loan repaid in equal monthly payments. Lines of credit, variable rates, balloon payments and merchant cash advances work differently.
It is an illustration of the arithmetic, not a loan offer, a sign of approval or a measure of what you can afford. A lender's terms, fees and payment can differ.
Fees count only if you enter them.
Worked example
A $50,000.00 loan at 9% a year, repaid monthly over 5 years (60 payments).
- Monthly rate
- 9% ÷ 12 = 0.75%
- Monthly payment
- $1,037.92
- Total repaid
- $62,275.07 over 60 payments
- Total interest
- $62,275.07 − $50,000.00 = $12,275.07
Budget about $1,037.92 a month. In the first year $4,163.51 of the payments goes to interest; by the last year it is $586.51.
Common questions
Is this the payment a lender will offer me?
Not necessarily. Lenders set their own rate, term and fees, and some loans are not repaid in equal monthly payments. Use the result to compare options and prepare questions, then confirm the figures in the lender's written terms.
Why does so much of the early payment go to interest?
Interest is charged on the balance you still owe. Early on the balance is highest, so more of each payment is interest. As the balance falls, more of the same payment goes to principal.
How does a loan payment fit with my other plans?
Add the monthly payment to cash paid out in the cash flow planner. To see the sales needed to cover it, add it to fixed costs in the break-even calculator.
Prepare before you apply.
Go Big Business Capital helps owners get ready to raise money: a capital readiness assessment, financial projections, lender-ready financial materials and financing structure guidance.