Business Loan Calculator
Monthly payment, total interest, and the all-in cost of an amortized business term loan — with the origination fee counted honestly, whether you pay it upfront or finance it into the principal.
Loan terms
Example: $150,000 at 9% for 10 years → $1,900.14/mo.
Companion guide: How the monthly payment formula works derives the payment formula this calculator runs — monthly compounding, the term in months, and what changes with rate and term — on a fictional loan. This page covers what the business loan calculator adds: the origination fee, the two ways the engine can count it, and the all-in cost line. Every explainer on the site is listed under Guides.
The fee, counted both ways
A fictional $150,000 term loan at 9% over 10 years costs $1,900.14 a month and $78,016 in interest across 120 payments. Add a $3,000 origination fee paid upfront and the all-in cost is $231,016: the $228,016 of payments plus the fee. Finance that same fee instead and the engine amortizes $153,000 rather than $150,000: the payment rises to $1,938.14, interest to $79,577, and the all-in cost to $232,577 — $1,560 more, because interest accrues on the fee for the full term. Every figure on this page is computed when the page is built by the same tested engine function that powers the calculator above; the rates, amounts and fees are illustrative inputs chosen for the arithmetic, not quotes.
What the engine computes, step by step
The form hands your inputs to one engine function, which validates them, runs the steps below in order, and returns a typed result — or an explicit, human-readable error if an input cannot be used. The interface only formats what comes back; it never does arithmetic of its own.
- Validation. The amount must be greater than zero, the fee non-negative and less than the amount, the rate non-negative and the term a positive number of years, each within an upper bound; a value that fails is refused before any arithmetic runs, with the engine's own message (quoted in the FAQ).
- Principal amortized = the amount, plus the fee when the "Finance the fee" box is ticked: $150,000 upfront, $153,000 financed. This is the only step the toggle changes.
- Monthly payment uses the standard amortized-loan (PMT) formula with monthly compounding, the convention behind US mortgages and most consumer loans: the annual rate ÷ 12 is the monthly rate (0.75% at 9%), years × 12 is the number of payments (120, rounded to a whole month), and the result is the one fixed payment that retires the principal exactly at the last month — $1,900.14 on $150,000, $1,938.14 on $153,000. The companion guide derives it.
- Total of payments = the payment × the number of payments: $228,016 and $232,577.
- Total interest = the total of payments − the principal amortized: $78,016 and $79,577. Financed, part of this figure is interest on the fee.
- Total cost of the loan = the total of payments, plus the fee only when it is paid upfront; a financed fee is already inside the payments, with interest on it: $231,016 against $232,577.
| Line | How the engine computes it | Fee paid upfront | Fee financed |
|---|---|---|---|
| Principal amortized | Amount, plus the fee when financed | $150,000 | $153,000 |
| Monthly payment | PMT at 9% over 120 months | $1,900.14 | $1,938.14 |
| Total of payments | Payment × 120 | $228,016 | $232,577 |
| Total interest | Total of payments − principal amortized | $78,016 | $79,577 |
| Origination fee | As entered | $3,000.00 | $3,000.00 |
| Total cost of the loan | Payments + fee when upfront; payments alone when financed | $231,016 | $232,577 |
Why the financed fee costs more than the fee
The payment formula is linear in the principal, so the payment on $153,000 is the payment on $150,000 plus the payment on $3,000 alone. Run the fee by itself at 9% over 10 years and the engine returns $38.00 a month — exactly the gap between the two payments. Across 120 payments that is $4,560.33: $3,000 repays the fee and $1,560.33 is interest on it, exactly the gap between the two all-in figures — an identity the page checks when it is built. Nothing about the fee is marked up; a financed fee becomes part of the balance, and the balance is what the engine charges interest on every month.
Month one, and the schedule behind the interest total
The result box reports total interest in closed form — payment × months, less the principal — the same figure a month-by-month schedule produces; the two are checked against each other at build time. Each month the engine charges interest on the balance still outstanding — balance × (annual rate ÷ 12) — and the remainder of the fixed payment reduces the principal. In month one of Example A with the fee upfront, the balance is the whole $150,000, so interest is $1,125.00 and $775.14 of the $1,900.14 payment reaches principal: 59.2% of the first payment is interest. Financed, month one charges interest on $153,000 instead — $1,147.50. Year 1 of the schedule records $13,107 of interest against $9,695 of principal, leaving $140,305 owing; year 10 records $1,074 against $21,728. Nothing is front-loaded by anyone; the interest charge follows the balance. The Amortization Calculator prints the year-by-year rows for any amount, rate and term.
What changes with the term
The amount scales the result in proportion and the rate enters through the monthly rate. The term reshapes the fee arithmetic: the table holds Example A's $150,000, 9% and $3,000 fee fixed and recomputes both treatments across four illustrative terms. Every cell is an engine output.
| Term | Payments | Payment, fee upfront | Total interest, fee upfront | All-in cost, fee upfront | All-in cost, fee financed | Cost of financing the fee |
|---|---|---|---|---|---|---|
| 3 years | 36 | $4,769.96 | $21,719 | $174,719 | $175,153 | $434.37 |
| 5 years | 60 | $3,113.75 | $36,825 | $189,825 | $190,562 | $736.50 |
| 7 years | 84 | $2,413.36 | $52,722 | $205,722 | $206,777 | $1,054.45 |
| 10 years | 120 | $1,900.14 | $78,016 | $231,016 | $232,577 | $1,560.33 |
Stretching the term from 3 to 10 years lowers the payment from $4,769.96 to $1,900.14 while raising total interest from $21,719 to $78,016, because the balance is outstanding, and charged interest, for 84 additional months. The last column moves the same way: financing the fee costs $434.37 over 3 years and $1,560.33 over 10. The engine reports both lines; whether a lower payment over more months or a higher payment over fewer fits a business's cash flow is not a question the arithmetic answers.
A second example, with the fee quoted as a percentage
Example B runs different fictional figures through the same function: $60,000 at 7.5% over 5 years, with a fee stated as 2% of the amount — $1,200, since the field takes dollars. Paid upfront, the payment is $1,202.28 across 60 payments, total interest $12,137, all-in cost $73,337. Financed, the engine amortizes $61,200: $1,226.32 a month, $12,379 of interest, and an all-in cost of $73,579 — $242.73 more. The calculator has no loan-type setting; the four figures are all it reads.
At an illustrative rate of 0% the engine takes a separate branch — there is no interest to spread, so the principal is divided evenly across the term: $60,000 ÷ 60 = $1,000.00 a month with the fee upfront and $61,200 ÷ 60 = $1,020.00 financed. Total interest is $0 either way and the two all-in costs coincide at $61,200: with no interest, a financed fee accrues nothing — the gap between the treatments is interest and only interest.
The reference figure, recomputed
The methodology page names the figure the engine is validated against: a $200,000 loan at 6% over 30 years. Run through this calculator's function with no fee when the page is built, it returns a payment of $1,199.10 and total interest of $231,676, matching the figures the methodology page and the automated tests expect: the fee handling sits on top of the same payment formula every calculator on the site shares. If the copy and the code ever disagreed, the site would fail to build rather than publish inconsistent numbers.
How to read the result
- The large "/ month" figure is the fixed payment on the principal amortized — $1,900.14 in Example A with the fee upfront, $1,938.14 financed — and is the same every month.
- Amount financed (fee rolled in) appears only when the box is ticked and a fee is entered: $153,000 in Example A.
- Total interest is interest on the principal amortized, shown to whole dollars; financed, it includes the interest on the fee.
- Origination fee appears only when a fee is entered, labelled "paid upfront" or "financed — interest accrues on it".
- Total cost of the loan is the total of payments plus the fee when paid upfront, or the total of payments alone when financed — $231,016 and $232,577 in Example A.
Money is shown to the cent, or to whole dollars for large totals like lifetime interest; internally every calculation keeps the full precision of IEEE-754 double-precision arithmetic and nothing is rounded between steps, so the total of payments is 120 unrounded payments summed, not the displayed payment × 120. Your lender's figure may differ by a few cents depending on their rounding and day-count conventions — the difference is presentational, not an error.
Where the calculator stops
The limits are the engine's, and the methodology page states them. The calculators model fixed-rate, fully amortizing loans. They do not model adjustable-rate mortgages, interest-only periods, balloon payments, or negative amortization: whatever rate you enter is held fixed for every month of the term. There is one fee field, a one-time dollar amount counted at the start; recurring or balance-dependent charges and prepayment are not modelled, and the engine has no built-in rates, fee schedules or caps — every figure comes from the fields. Converting the fee into an effective annual rate is the APR Calculator's job, and Fee-adjusted APR explained sets out that conversion. The engine does not know your lender's day-count or rounding conventions, and a correct calculation can still be the wrong calculation for your situation — choosing the right loan for a real-world decision is judgment we cannot automate. The Loan Calculator runs the same payment formula without the fee handling.
Frequently asked questions
What does the origination fee do to the cost?
Paid upfront, it is a one-time addition to the all-in figure: the payment stays at $1,900.14 and the total cost is $228,016 of payments plus the $3,000 fee, $231,016. Financed, it joins the principal before the payment is computed, so the payment rises to $1,938.14 and the all-in cost to $232,577 — $1,560 of interest on the fee over the term.
Why does financing the fee cost more than the fee itself?
Because the payment formula is linear in the principal: the payment on $153,000 is the payment on $150,000 plus the payment on $3,000 alone, $38.00 a month. Over 120 payments that is $4,560.33 — $3,000 repaying the fee and $1,560.33 of interest on it, exactly the gap between the two all-in figures.
Which rate and term does the calculator expect?
The figures stated in the offer you are evaluating; the engine has no default rate, term or fee and no loan-type setting. The rate goes in as an annual percentage, which the engine divides by twelve; the term in years, which it rounds to whole months.
Is "Total cost of the loan" the same as the total of payments?
Only when the fee is financed or there is no fee. Upfront, the line is every payment plus the fee: $228,016 + $3,000 = $231,016 in Example A. Financed, the fee is already inside the payments, with interest on it, so nothing is added and the line equals the $232,577 total of payments.
Does the calculator compute an APR or an effective rate?
No. It reports the payment, total interest at the rate entered, the fee and the all-in cost in dollars; it does not solve for the rate that would make the fee equivalent to a higher rate. The APR Calculator runs a different engine function for that, and the Fee-adjusted APR explained guide sets it out.
The offer states the fee as a percentage of the loan. What do I enter?
Dollars — multiply first. Example B's fee is 2% of $60,000, so $1,200 goes in the field: $1,202.28 a month and $73,337 all-in upfront, $1,226.32 and $73,579 financed. Several one-time charges can be summed and entered as one figure.
Why does the payment not change when I enter an upfront fee?
Because an upfront fee is not borrowed. The payment is computed from the principal actually amortized — the $150,000 you entered — and the fee appears only in the all-in cost line. The payment moves only when the "Finance the fee" box is ticked: the principal becomes $153,000 and the payment rises by $38.00.
Which inputs does the calculator refuse?
Each input is validated before any arithmetic runs, and the engine returns its own message rather than a number. An amount of zero: "The loan amount must be greater than 0." A fee as large as the amount: "The origination fee must be less than the loan amount." A negative fee: "The origination fee cannot be negative." A negative rate: "The interest rate cannot be negative." A term beyond the engine's limit: "Terms are limited to 60 years."
Not financial advice: a general educational estimate. Business-loan pricing, eligibility, and program terms are lender-specific and change over time — rely on written offers and primary sources. Values are processed locally in your browser and never transmitted. See the methodology page.