Calculate monthly payments, total interest, and see a full amortization schedule. Compare the same loan at different interest rates to quantify exactly what your rate costs.
Loan payments are calculated using the amortization formula, which ensures each payment covers the interest owed plus a portion of the principal. Early payments are mostly interest; later payments are mostly principal.
Where: M = monthly payment, P = loan amount, r = monthly interest rate, n = number of payments
• Make extra payments — even small additional payments reduce your principal faster and save significant interest over time.
• Choose a shorter term — a 3-year loan costs less total interest than a 5-year loan, though monthly payments are higher.
• Shop for lower rates — a 1% rate difference on a large loan can save thousands over the term.
Use these alongside the loan calculator for a complete financial picture:
→ Compound Interest Calculator — See how savings grow over time with compound interest working in your favour.
→ Debt Payoff Calculator — If you have multiple debts, compare avalanche vs snowball methods to pay them off faster.
→ Break-Even Calculator — Find out how much revenue you need to cover your loan repayments and other costs.
→ ROI Calculator — Calculate whether the return on a loan-financed investment justifies the cost.
Enter loan details to compare the same loan at your rate, 2% lower, and 2% higher. Term is in years, matching the calculator above.
When evaluating a business loan, the monthly payment is only part of the picture. The total interest cost — the sum of all interest payments over the full loan term — is often dramatically higher than borrowers expect. The rate comparison feature above immediately quantifies how much a better rate saves you on any specific loan.
A longer loan term reduces monthly payments but increases total interest significantly. A $50,000 loan at 7% APR over 3 years costs $5,579 in total interest. The same loan over 5 years costs $9,404 — $3,825 more for the identical loan amount. Choose the shortest term your cash flow can comfortably support to minimise total borrowing cost.
An amortization schedule shows each monthly payment broken into its principal and interest components. In the early months, most of each payment covers interest. Over time, the interest portion decreases and the principal portion increases. The calculator generates this breakdown automatically so you can see how quickly the balance reduces each month.
Term loans offer a fixed amount, fixed rate, and fixed monthly payment — predictable and straightforward. SBA loans (US) are government-backed with lower rates and longer terms than conventional loans, requiring more documentation but significantly cheaper overall. Business lines of credit are revolving facilities for working capital management. Equipment financing offers lower rates than unsecured loans because the equipment serves as collateral. Invoice financing allows borrowing against outstanding receivables.
The interest rate on a business loan is negotiated based on your creditworthiness, business financials, and application quality. A personal and business credit score above 700 qualifies for materially better rates. Most conventional lenders require 2+ years of trading history. Lenders want to see a debt service coverage ratio (DSCR — net operating income divided by total debt payments) above 1.25. Offering collateral reduces lender risk and lowers your rate. Getting quotes from multiple lenders before committing typically saves 2-4% in rate — use the rate comparison above to quantify the savings in dollar terms before deciding whether to do the extra work.
Understanding loan costs abstractly is useful; seeing them in concrete scenarios is more useful. Here are four common business loan scenarios with exact figures from the calculator to ground the theory in real decision-making numbers.
Monthly payment: $783. Total interest: $3,203. Total cost: $28,203. At the end of 3 years, you own the equipment outright and monthly cash flow returns to normal. Compare this to leasing the same equipment at $500/month for 3 years ($18,000 total) with no ownership at the end, versus a finance option at 12% ($830/month, $4,893 total interest, $29,893 total cost). The rate comparison above makes these trade-offs immediately visible for any specific loan.
Monthly payment: $4,396. Total interest: $2,752. Total cost: $52,752. A short-term working capital loan at 10% costs just 5.5% of the loan amount in interest over 12 months — relatively cheap. The same $50,000 over 36 months at 10% costs $8,120 in total interest (16.2% of the loan amount). Shorter terms are dramatically cheaper in total interest cost, even if the monthly payment is higher.
Monthly payment: $2,970. Total interest: $28,200. Total cost: $178,200. This is a significant total interest cost — nearly 19% of the loan amount — but spread over 60 months it represents a manageable cash flow impact if the expansion generates sufficient incremental revenue. The key question is whether the incremental monthly EBITDA from the expansion exceeds $2,970 with enough margin for risk. If it does, the loan is accretive. If not, reconsider the expansion or seek a lower rate.
At 7% (SBA rate): Monthly $2,322, total interest $78,660. At 11% (conventional rate): Monthly $2,755, total interest $130,600. On the same $200,000 loan over 10 years, the difference between a 7% SBA rate and an 11% conventional rate is $51,940 in total interest — more than a quarter of the original loan amount. The extra documentation and time required to secure an SBA loan pays for itself many times over on any loan above $100,000.
Beyond credit scores and revenue figures, lenders evaluate the quality of your business plan and the credibility of your financial projections. A detailed business plan that honestly addresses market risk, demonstrates an understanding of the competitive landscape, and presents conservative financial projections with clearly stated assumptions will stand out from applications that present only optimistic scenarios. Use our Business Plan Generator to build the framework lenders expect to see, and our Break-Even Calculator to demonstrate the specific point at which the investment in the loan becomes cash-flow positive.