This business loan payment calculator from Rockstone Lending, a small-business funding broker in Yuma, Arizona, estimates the monthly payment, total interest and total repaid on a standard amortizing loan from the amount, annual rate and term you enter. It is illustrative arithmetic only, not an offer; lending partners set actual rates and terms. To talk through an offer, call (928) 436-5545.
How the calculation works
The calculator uses the standard formula for a fully amortizing loan with equal monthly payments:
- Monthly rate (r) = the annual rate you enter, divided by 100, divided by 12
- Monthly payment = amount × r ÷ (1 − (1 + r)−n), where n is the term in months
- Total repaid = monthly payment × n
- Total interest = total repaid − amount
It assumes a fixed rate, one payment a month, no fees and no balloon payment. If a loan takes payments weekly or daily, has a variable rate or ends with a balloon, the real schedule will differ. You can run the same formula in any spreadsheet if you'd rather not use the widget.
How amortization works
Each payment on an amortizing loan first covers the interest that has built up on the balance still owed, and the rest reduces the balance. Early in the loan the balance is largest, so more of each payment goes to interest; later, more goes to principal. The payment stays the same throughout.
Two practical consequences:
- A longer term lowers the payment but raises total interest, because the balance is outstanding for longer. Try the same amount and rate with two different terms to see the trade-off.
- Paying early can reduce interest on a loan like this, depending on the agreement's prepayment terms. Some loans charge a prepayment fee or calculate payoff differently; ask the lender.
Interest rate vs. APR: which number to enter
An offer may show an interest rate, an APR or both. They are not the same:
- The interest rate is what the loan charges on the balance. It drives the actual payment.
- The APR expresses the cost of credit, including certain fees, as a yearly rate, so loans with different fees can be compared.
To estimate the payment on the lender's schedule, enter the interest rate. Entering the APR instead gives a rough sense of the cost including those fees, but the payment shown won't match the lender's. A business loan offer may not state an APR at all. If yours doesn't, ask the lender for one, or for the total amount you will repay and a list of every fee, so you can compare offers on the same basis.
Costs this calculator doesn't show
- Origination, underwriting, documentation and other fees, including any deducted from the money you receive
- Late-payment fees and prepayment terms
- Rate changes on a variable-rate loan
- Required insurance, collateral and any personal guarantee
If fees are deducted up front, you receive less than the loan amount but repay the full amount, which raises the true cost. Compare offers on the total you will repay against what you actually receive. For broader context, see how the business loan types compare. For equipment purchases with a down payment, use the equipment financing calculator. A merchant cash advance is not a loan and is priced differently; use the MCA cost calculator for that.
By Rockstone Lending · Updated
