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Business Loan Calculator
Estimate your monthly business loan payment, total interest and the effective cost including any origination fee, and see how the balance falls over time. Enter your numbers and press Calculate.
Written by TopicDrill Editorial Team·Updated June 2026
Remaining balance over time
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How the business loan calculator works
A fixed-rate business loan is amortized, so every monthly payment is identical. Early payments are mostly interest because interest is charged on the full outstanding balance. As you pay the balance down, more of each payment goes to principal, which is why the payoff chart above falls slowly at first and faster toward the end.
The total interest is simply the sum of every interest charge over the life of the loan. Add the one-time origination fee on top and you get the effective cost of borrowing, which is the most honest way to compare two offers that have different rates and fees.
A quick example
Borrow $100,000 at 9% over 5 years with a 2% origination fee. The monthly payment is about $2,076, and you pay roughly $24,560 in interest. The 2% fee adds $2,000, so the effective cost of the loan is close to $26,560 on top of the amount you borrowed.
Things to keep in mind
This is an estimate for a standard amortizing loan. Some business financing uses factor rates, daily payments or balloon structures that work differently. For guidance on small business financing, the U.S. Small Business Administration is a reliable starting point. You can also compare scenarios with our other free calculators.
Frequently asked questions
How is a business loan payment calculated?
Most fixed-rate business loans amortize, meaning each monthly payment is the same and covers both interest and principal. The payment uses M = P·r(1+r)^n / ((1+r)^n − 1), where P is the loan amount, r is the monthly rate and n is the number of monthly payments.
What is an origination fee?
An origination fee is a one-time charge a lender adds for processing the loan, usually a percentage of the amount borrowed. It is often deducted from the funds you receive or added to your balance, so it raises the real cost of the loan beyond the stated interest rate.
What does effective cost include?
In this calculator, the effective cost is the total interest you pay over the life of the loan plus the one-time origination fee. Looking at this combined number gives you a clearer picture of what borrowing truly costs than the interest rate alone.
How can I lower the cost of a business loan?
A shorter term, a lower rate or a smaller amount all reduce total interest. Comparing lenders, improving your business credit and negotiating or avoiding fees can also cut the effective cost. Paying extra toward principal when allowed shortens the term and saves interest.
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