Business Term Loan Calculator
When you get a term sheet for a term loan, you will likely be quoted an interest rate, repayment term (between 1-5 years), and other associated fees, such as an origination fee or monthly administration fee. First calculate the dollar amount of the added fees, then plug your terms into the calculator below to find out the true cost of your loan offer.
Business Loan Calculator Definitions
Loan Amount
The loan amount should be easy for you to spot — it’s the total amount the lender is offering to your business.
Interest Rate
The interest rate is the percentage that will be charged on the amount of money you borrow from the lender. You may have heard “APR” and “interest rate” used interchangeably, but they’re not the same thing. The APR looks at the entirety of the loan cost, including fees. That’s why it’s so important to use a business loan calculator to find out your APR — it helps you examine loan terms with different fees to make an apples to apples comparison and get the lowest-cost option that’s best for you
Origination & Application Fees
An origination fee is charged by the lender as an upfront cost of processing, underwriting and issuing the loan. Application fees help cover the cost a lender incurs to check your personal and/or business credit, do a background check, etc
Loan Term
The loan term is essentially the length of your loan. For business term loans, this is often expressed in months since the repayment term is shorter than other term loans, like the popular 30-year mortgage.
Monthly Servicing Charge
A lender may ask you to pay a monthly fee to service your loan. This fee is applied toward ongoing lender costs, similar to the origination fee.