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Business Loan Repayment Calculator

The principal you're borrowing, before any arrangement fees.

The nominal annual rate quoted by the lender. Enter 0 for an interest-free facility.

How many monthly instalments the loan is repaid over (e.g. 36 = 3 years).

Try a scenario:
— Monthly repayment
— Total interest
Total repaid — Every instalment added up over the full term — the true cash cost of the loan.

Enable JavaScript to calculate instantly. The full method is explained below, so the page is useful either way.

Borrowing to fund stock, equipment or growth only makes sense if the repayment fits your cash flow and the total cost is one you'd knowingly accept. The headline monthly figure is what hits your bank account every month, so it has to sit comfortably alongside rent, payroll and tax — a repayment that looks affordable in a spreadsheet can still strangle a business in a slow month. This calculator gives you that monthly number instantly so you can sense-check a loan against your real cash position before you commit to it.

Just as important is the figure most loan adverts bury: the total you'll repay and how much of that is pure interest. Two loans with similar monthly payments can differ by thousands once you add up every instalment over the term, because a longer term lowers the monthly figure while quietly increasing the total cost of borrowing. Seeing the monthly payment, the total repaid and the total interest side by side turns an abstract rate into a concrete trade-off you can actually weigh. This is repayment maths only — it is not a quote, a lending decision, or financial advice.

How this calculator works

The calculator uses standard loan amortisation — the same equal-instalment method banks use, where every monthly payment is identical but the split between interest and principal shifts over time.

First the annual rate is converted to a monthly rate: r = annual rate ÷ 100 ÷ 12. Then the fixed monthly repayment is P × r ÷ (1 − (1 + r)−n), where P is the loan amount and n is the number of monthly instalments. Total repaid is simply the monthly repayment × n, and total interest is the total repaid minus the original amount borrowed.

If the interest rate is 0% (a genuine interest-free facility), the amortisation formula breaks down mathematically, so the calculator instead splits the principal evenly: monthly repayment = P ÷ n, with total interest of exactly £0. A zero rate is treated as valid; a zero loan amount or zero term is not, because there is no meaningful loan to model.

Worked example

Suppose you borrow £20,000 at 9% per year over 36 months. The monthly rate is 9 ÷ 100 ÷ 12 = 0.0075. The monthly repayment is £20,000 × 0.0075 ÷ (1 − 1.0075−36) = £635.99. Over 36 months that's a total repaid of £635.99 × 36 = £22,895.64, of which £22,895.64 − £20,000 = £2,895.64 is interest. So the £20,000 of useful cash actually costs you nearly £2,900 — useful to know before you sign, and worth comparing against a shorter term that raises the monthly figure but cuts that interest bill.

Assumptions & limits

  • A fixed interest rate and equal monthly instalments (standard amortisation) are assumed — variable-rate, interest-only or balloon structures are not modelled.
  • No arrangement fees, broker fees, insurance or early-repayment charges are included, so the real cost of a fee-bearing loan will be higher than shown.
  • This is representative repayment maths for planning only — not a quote, a credit decision, an APR/APRC figure, or financial advice. Always rely on the lender's own illustration before committing.

Frequently asked questions

Does this include arrangement fees?
No. The calculator models only the repayment of the principal plus interest. Arrangement fees, broker fees and insurance are excluded, so a fee-bearing loan will cost more in practice than the total shown here. Add any fees separately when comparing offers.
Why does a longer term lower my monthly payment but cost more overall?
Spreading the same principal over more instalments shrinks each payment, but interest accrues for longer, so the total interest — and therefore the total repaid — rises. The monthly figure and the total cost pull in opposite directions, which is exactly why both are shown.
Can I enter a 0% interest rate?
Yes. A genuine interest-free facility is valid: the calculator splits the principal evenly across the term and reports total interest of £0. Only a zero loan amount or zero term is rejected, because there's no loan to model.
Is the result the same as the APR the lender quotes?
Not necessarily. APR/APRC bundles in fees and uses a regulated calculation method. This tool uses the nominal rate you enter on the principal alone, so treat it as a planning estimate, not the lender's official figure.