Finance Lab

True cost of a business loan

See the repayment, the total interest and the real rate once fees are counted.

The repayment is the amortising payment on the amount drawn. The comparison rate is the rate at which the discounted repayments plus fees equal the net cash you actually received after up-front costs.

Step 1 · Enter your figures

Every box starts with an example figure. Replace each one with your own — the result updates as you type. Nothing you type is sent anywhere or stored.

Amount borrowed

The facility limit you will draw.

Interest rate

The annual rate quoted.

Term

Length of the loan.

Fees payable up front

Establishment, valuation, legal and broker fees paid at the start.

Ongoing monthly fee

Account or line fee charged each month.

Step 2 · Read the result

Real cost of the money

10.4%

The rate once fees and the cash you actually received are counted, not the headline rate.

Monthly repayment including fees: $5,275
Total interest over the term: $65,028
Total fees over the term: $5,500
Total repaid: $316,528
Cash you actually receive: $246,000

The figures side by side

Monthly repayment including fees$5,275
Total interest over the term$65,028
Total fees over the term$5,500
Total repaid$316,528
Cash you actually receive$246,000

What this answer rests on (9)

Amount borrowed$250,000
You entered this
The facility limit you will draw.
Interest rate9.5%
You entered this
The annual rate quoted.
Term5.0 years
You entered this
Length of the loan.
Fees payable up front$4,000
You entered this
Establishment, valuation, legal and broker fees paid at the start.
Ongoing monthly fee$25.00
You entered this
Account or line fee charged each month.
The rate you entered is the one applied. No rate, threshold or statutory figure is supplied by the platform — confirm it from the current published source before you rely on the result.
The calculator applied this
The rate is fixed for the whole term and repayments are monthly in arrears.
The calculator applied this
Up-front fees are paid from the drawdown, so the cash received is less than the amount borrowed.
The calculator applied this
Early repayment costs, redraw and offset benefits are not modelled.
The calculator applied this

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What this means for you

What the money really costs once fees are counted and the cash you actually receive is less than the amount borrowed.

How to read it

Compare the real cost against the headline rate. The gap is the fees.
Total repaid against the amount borrowed is the plain-English answer.
Use the real cost, not the quoted rate, when you compare lenders.

Watch out for

Break costs and early repayment fees on a fixed facility.
Rates that are variable, so the repayment shown holds only while the rate does.
Personal guarantees and security, which are not a cost until something goes wrong.

Assumptions behind this result

The rate you entered is the one applied. No rate, threshold or statutory figure is supplied by the platform — confirm it from the current published source before you rely on the result.
The rate is fixed for the whole term and repayments are monthly in arrears.
Up-front fees are paid from the drawdown, so the cash received is less than the amount borrowed.
Early repayment costs, redraw and offset benefits are not modelled.

General information only. This calculator does not take your circumstances into account and is not financial, tax, legal or investment advice. Confirm every rate, threshold and figure with your own adviser before acting.

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Other tools in funding and finance.

Take this further

Members run this calculator on their own recorded figures, save the workings to their workspace, export them to Word or Excel, and read the lessons that teach the thinking behind the result.

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