Free Business Loan Calculator (Monthly Payment & Amortization)
Your monthly payment is the fixed amount that covers both principal and interest until the loan is repaid. This calculator gives you the exact monthly payment, total interest and total repayment for any business loan — plus a visual split of how much of your payments go to interest versus principal.
Results
Principal vs interest
- Principal74.9%
- Total interest25.1%
Disclaimer: This calculator provides estimates only and does not constitute financial advice. Actual loan terms may vary by lender.
What the Business Loan Calculator does
A business loan monthly payment calculator converts a loan amount, annual interest rate and repayment term into the fixed monthly installment a lender will collect, along with the total interest cost over the life of the loan. It uses the standard reducing-balance amortization formula that virtually every fixed-rate term loan follows.
Methodology and formula
Monthly payment = P x R x (1+R)^N / [(1+R)^N - 1], where P = principal, R = monthly interest rate (annual rate / 12), N = number of monthly payments (see Consumer Financial Protection Bureau guidance on amortizing loans).
Worked example
- Inputs
- Loan amount 50,000; annual rate 9%; term 5 years (60 months).
- Result
- Monthly payment approximately 1,038; total interest approximately 12,265; total repayment approximately 62,265.
Over 5 years at 9%, interest adds roughly 24% on top of the principal. Shortening the term to 3 years would cut total interest by more than half even though the monthly payment rises.
When to use this tool
Use this calculator to size the monthly payment before you apply. Once approved, switch to the Amortization Schedule Calculator to see the full month-by-month breakdown, or the Loan Refinance Calculator if you already hold the loan and a better rate appears.
About the Business Loan Calculator
How monthly payment is calculated
Monthly payment = [P × R × (1+R)^N] / [(1+R)^N − 1], where P is the principal, R is the monthly interest rate (annual rate ÷ 12 ÷ 100) and N is the tenure in months. Every monthly payment is identical, but the split between principal and interest shifts across the tenure.
Front-loaded interest — the hidden cost
In the first months of a loan, 70–80% of each monthly payment is interest. Only in the second half of the tenure does the principal component overtake interest. That's why part-prepayment in the early years saves dramatically more than the same prepayment near the end.
Choosing tenure
Longer tenure → lower monthly payment but much higher total interest. Shorter tenure → higher monthly payment but far less interest paid. Pick the shortest tenure your monthly cash flow can comfortably absorb.
Frequently asked questions
How is the monthly payment calculated?
Does the monthly payment change over the loan tenure?
Can I switch between months and years for tenure?
Useful next steps in other categories
Hand-picked tools from other BusinessTools.Online categories that pair with this one.
- Break-even calculatorFind the sales volume that covers the new loan repayment.
- Net profit margin calculatorSee whether the margin left after interest is still workable.
- Partnership agreement generatorRecord how partners share liability for business borrowing.
- Amortization schedule calculatorBreak the same loan into a month-by-month principal and interest table.
Related Loan Tools
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Amortization Schedule Calculator
Generate a full month-by-month amortization table with principal, interest and balance for any loan.
Open toolLoan Eligibility Calculator
Estimate the maximum loan amount you qualify for based on income, existing monthly debt payments and FOIR.
Open toolLoan Refinance Calculator
Compare your existing loan against a refinancing offer. See new monthly payment, total interest saved and breakeven month.
Open tool