Business Loan Calculator


When you want to start or expand your business, chances are you will need a business loan. Due to the terms and rates varying greatly among lenders and individual business needs, it helps to have a business loan calculator handy so that you can determine not only your monthly payment, but how extra payments, whether monthly or annually will affect your balance. In addition, it allows you to see how much interest you pay over the life of the loan, giving you a reality check on whether or not you should borrow the money.


Using the Calculator


Most business loan calculators are plug and play – you plug in your individual factors and the calculator spits out the information you need. In order to figure out your payment, you will need to know the amount of the loan, the number of years you will have to repay it (the term), the interest rate you will pay, and the date the payments will start. If you wish to see how extra payments will affect your outcome, you will need to determine how much extra you plan to pay and at what frequency. For example, if you know you will have a lump sum of money to put towards the debt once a year, you can enter that amount or if you want to see how paying an extra $100 a month would affect your payoff, you could try that scenario.


The Interest Rates Charged


When you use the business loan calculator, you will see the principal and interest amortized over the life of the loan. These numbers will vary every single month and will depend on the interest rate you pay. Today, interest rates vary between 6 and 13 percent, depending on the factors affecting your application including your business and personal credit history, assets on hand, number of years in business, the amount you need to borrow, and the collateral you have to put up in the event that you default on your payments.

Every lender offers different interest rates and terms on business loans, so it pays to shop around with a few lenders before deciding on the right product for you. As you shop, make sure to use a business loan calculator to help you determine just how much difference each interest rate costs you and how the various terms (time you have to pay off the debt) affect the amount of interest you pay in the long run.