Any business searching for a loan should know what to expect when paying it off. A business loan calculator can help you understand what you will likely spend on a loan. You can learn how your loan will work through a calculator, including how principal and interest payments can change during its lifespan. You can also use a calculator to compare different loan options and see which ones you can afford the most.
You’ll learn about five different small business loan calculators in this guide. These apps can help you see what to expect in a loan, but each still has concerns.
What Is a Business Loan Calculator?
A business loan calculator is an online tool that helps you review how much you will spend on a business loan. You can use a calculator by entering how much you want to borrow, how many months the loan will last, and the annual percentage rate or APR for the loan. Some calculators may also let you add extra payments, although the terms for doing so will vary.
The details in a small business loan calculator are general estimates of what you’ll spend on a loan. Various other factors might influence what to spend on a loan, but a calculator will help you see what to expect.
Top 5 Small Business Loan Calculator Options
Forbes Advisor
Your first option to see in a business loan payment calculator comes from Forbes Advisor. You can enter the loan amount, term, and APR to review the total cost of your loan based on the monthly payments you’ll spend and the total amount the loan will be worth when interest appears.
This calculator also has an amortization schedule where you can see how much interest will add to your loan over time. You can see how much you’re spending in principal versus interest each month. This design helps you review how the interest charges for a loan will start to decline as you pay off more of the principal.
Pros
Simple to use
The amortization schedule is easy to read
See how much percentage of your loan goes towards interest
Cons
Doesn’t consider any fees or charges on your loan
The calculator assumes you’ll keep making the same payment each month
Nerdwallet
Nerdwallet’s business loan calculator is the second choice you can review. This calculator lets you choose your estimates for a loan, or you can select a preset option based on whether you’ll get an online term loan, a business line of credit, or an SBA 7(a) loan.
You’ll enter the same details on this calculator to review your expected monthly payment alongside both the principal and interest for your loan. The amortization schedule here lists an annual review of what you’ll spend on interest and principal each month.
Pros
Simple definitions of all concepts in this calculator
Works for APR rates of varying values
You can use this to calculate low-value loans
Cons
The amortization schedule only shows a yearly total
Little difference in results based on whatever loan type you select
Bankrate
Bankrate lets you calculate your business loan amount based on the years in your loan term or how many months that term will last. This feature works if you’re looking for a very long or short-term loan.
The calculator also factors in extra payments. You can enter how much extra you might spend on your loan each month, or you can include a one-time payment during a specific month or an extra yearly contribution occurring during one particular month each year. You’ll see how you can pay off your loan sooner if you add those payments by looking at the amortization schedule.
Pros
You can enter extra payments as necessary
The calculator lists when you’ll pay off a loan and whether you’ll do so early
Flexible term options
Cons
Adding new payments doesn’t reduce the monthly amount you’ll spend
Doesn’t factor in any possible rate adjustments
Shopify
The online retail platform Shopify has a business loan payment calculator that helps you review your approximate expenses based on your loan amount, APR, term length in years, and any extra monthly payments you might make.
You can add monthly payments to review how the average monthly interest on your loan will drop when you pay more each month. You can also see how you can pay your loan in less time if you add those payments.
Pros
The brief interview is simple
The page includes multiple FAQs on managing small business loans
Interest rates can be specified to the hundredths
Cons
Assumes your extra payments are the same or will always be consistent
No adjustable rate options
IQ Calculators
IQ Calculators makes the last of the small business loan calculators you can use. You can list the loan amount, term in years, and interest rate. The calculator automatically calculates the monthly payment, but you can adjust that if you want to pay off more each month. The calculator provides charts and graphs showing how your interest and principal payments will evolve throughout the loan.
You can also enter the purchase price of something you used for your loan and then add the annual appreciation rate. This feature is necessary for cases where you’re using a business loan to acquire property for real estate for your .
Pros
Simple calculations
The charts are easy to read
You can add whatever additional payments you want
Cons
Not all people will benefit from the extra field options
Assumes all extra contributions are divided by month and not by year
What’s the Best Business Loan Payment Calculator?
Our analysis of these business loan payment calculator options shows that Bankrate has the more helpful choice. Bankrate’s calculator provides a simple layout, plus you can see how your interest charges will decline when you add extra payments. Shopify’s calculator is also ideal for how it provides further info on how to get a loan working for you.
How Do Small Business Loan Calculators Compute For Interest Rate?
A small business loan calculator will use a simple calculation to determine what you’ll spend on a loan:
- You will enter the loan amount, the number of months or years you’ll spend paying the loan, and then the annual percentage rate or APR.
- A calculator will review the approximate amount you’ll spend each month on your loan. The principal is divided by an extended calculation surrounding the number of months left on a loan, the periodic interest rate, and whatever is left on your loan.
- The calculation will reveal how much you will spend each month. You can then check the amortization table to see what you’ll spend on principal and interest each month.
- Some calculators also let you add additional payments to your loan. These payments can include one-off contributions or an extra amount you’ll spend each month.
What Are the Factors Affecting Business Loan Payments?
Business loan calculators give borrowers an idea of what they’ll spend each month, but there are a few other points to note when finding out what you’ll pay each month:
- Any additional payments you make during the life of your loan can influence your payments. You can either take less time to pay off a loan after making an additional payment, or you can reduce the total you’ll spend each month.
- A down payment can reduce the total monthly expense for your loan. A down payment is a single payment you use at the start of the loan. By substantially reducing the principal at the start, you’ll also reduce the interest you spend during the life of the loan.
- Adjustable rates can influence your future payments. Not all business loans feature adjustable rates, but the ones that do could provide a lower rate if your credit rating improves.
- Your credit history can influence the total charges. Businesses with stronger credit ratings will spend less on interest, while less-experienced s or ones with bad credit will have to spend more. The shift is a measure of the risk a lender holds in providing money to a business through a loan.
You can use a business loan calculator to help you understand what you could spend on a loan before taking one out. Talk with us at the CapCompass for details on how a loan can work for you.
People Also Ask:
How are business loans calculated?
Business loans are calculated based on how much you’re borrowing, the interest rate, and the time you’ll spend paying off the loan. While you can select what you’ll borrow and how long you’ll spend with the loan, a lender will determine the rate of your loan. The rate can be determined based on your credit rating, current market rates, the risk of your industry, or other factors a lender might review. Be sure when finding a small business loan that you contact your lender for details on its terms and other factors, plus a business loan calculator can help you see what you may get from your loan.