Business Loan Payment Calculator

Calculate your monthly business loan repayments, total interest paid, and total cost of borrowing. Compare loan terms and interest rates before signing.

A loan payment calculator determines the fixed periodic payment required to repay a loan over a set term at a given interest rate, using the standard amortisation formula. It applies to all fixed-rate instalment loans: personal loans, car loans, business loans, student loans, and fixed-rate mortgages. The calculator shows not just the monthly payment but the total amount repaid and total interest cost — figures that are often larger than borrowers expect, particularly for longer-term loans. Profit Margin Calculator and Business Break Even Calculator extend this to full debt management analysis.

Enter the loan principal (amount borrowed).
Enter the annual interest rate (APR).
Enter the loan term in months or years.
The amortisation formula calculates the fixed periodic payment.
Review total repayment and total interest figures before committing.
Model different terms to find the optimal balance between monthly affordability and total interest cost.

Loan payment formula

Monthly payment = P × r / (1 − (1 + r)^−n)

where P = principal, r = monthly interest rate (annual rate ÷ 12 ÷ 100), n = number of monthly payments.

Worked example: 25,000 loan at 6.5% APR for 5 years (60 months). r = 6.5/12/100 = 0.005417. Payment = 25,000 × 0.005417 / (1 − 1.005417^−60) = 489/month. Total repaid = 489 × 60 = 29,340. Total interest = 4,340 (17.4% of principal).

Understanding loan repayment

Interest cost by term

Total interest paid increases substantially with longer terms: a 25,000 loan at 7% APR over 3 years costs approximately 2,750 in interest; over 5 years approximately 4,600; over 7 years approximately 6,600. Extending the term reduces monthly payment but significantly increases the total cost. Always compare total cost of credit (not just monthly payment) when choosing between loan options.

Business tips and best practices

Always compare loans by APR, not by monthly payment or nominal rate — APR includes fees and is the standard basis for accurate comparison.
Making overpayments (even small amounts) reduces the outstanding principal, cuts total interest, and shortens the loan term — check whether your agreement permits this penalty-free.
For business loans, interest is typically tax-deductible — the after-tax cost of borrowing is lower than the headline rate; consult your accountant for the applicable treatment.

See formula and results sections for key figures and benchmarks.

Common mistakes to avoid

See tips section for common pitfalls to avoid.

Consumer credit regulation requires lenders to disclose APR, total amount payable, and key terms in most jurisdictions. Always read the full credit agreement before signing. If struggling with loan repayments, contact the lender early — most have forbearance arrangements — and seek free debt advice from a regulated service in your jurisdiction. This calculator is for illustrative purposes only and does not constitute financial advice.

Frequently Asked Questions

What is APR?

APR (Annual Percentage Rate) includes the interest rate plus any mandatory fees. Always compare APR — not just headline rates — when comparing loan offers.

How can I reduce total interest paid?

Shorten the loan term, make overpayments when cash allows, or negotiate a lower rate.

Is this suitable for mortgages?

Yes — the underlying amortisation formula is the same for any fixed-rate instalment loan.