Finance
Calculate your monthly business loan payment and understand the true cost including origination fees.
Monthly Payment (EMI)
$2,117$
Fixed monthly instalment for 60 months
The monthly EMI uses the reducing-balance formula. Total cost includes principal, interest, and origination fee. Effective APR accounts for the origination fee reducing your effective proceeds.
A business loan calculator estimates your monthly payment (EMI) based on the principal amount, annual interest rate, loan term in months, and origination fee percentage. Unlike simple loan calculators, it computes the effective APR by factoring in the origination fee, which reduces your net proceeds while you pay interest on the gross amount—a critical distinction for business financing decisions.
The calculator adds your origination fee to the principal to determine the total financed amount. It then applies the reducing-balance EMI formula using your stated interest rate and loan term to compute your fixed monthly payment. The tool calculates total interest, total cost of the loan, and the effective APR, which reflects the true cost when the upfront fee is considered alongside the interest rate.
EMI = [A × r × (1 + r)^n] / [(1 + r)^n - 1]; where A = Principal + (Principal × Fee%); Effective APR ≈ Stated Rate + (Fee% × 1200 / Term_Months)A is the total financed amount (principal plus origination fee), r is the monthly interest rate (annual rate ÷ 1200), and n is the loan term in months. The effective APR approximates the true cost by adding the fee impact to the stated rate, showing lenders how much you truly pay for borrowing.
| Input | Result | Notes |
|---|---|---|
| Principal: $100,000 | Rate: 9% | Term: 60 months | Fee: 2% | Monthly Payment: $2,117 | Origination Fee: $2,000 | Total Interest: $25,041 | Total Cost: $127,041 | Effective APR: 9.4% | A typical small business loan with moderate origination fee financed into the loan; effective APR reflects the true cost of borrowing |
| Principal: $250,000 | Rate: 8% | Term: 84 months | Fee: 2.5% | Monthly Payment: $3,994 | Origination Fee: $6,250 | Total Interest: $79,243 | Total Cost: $335,493 | Effective APR: 8.36% | A larger business expansion loan; longer 7-year term reduces monthly payment but increases total interest significantly due to compounding |
| Principal: $50,000 | Rate: 11% | Term: 36 months | Fee: 3% | Monthly Payment: $1,686 | Origination Fee: $1,500 | Total Interest: $9,198 | Total Cost: $60,698 | Effective APR: 12.0% | Higher rate and origination fee typical for startup or higher-risk lending; shorter 3-year term limits total interest despite higher APR |
An origination fee is an upfront charge (typically 0.5% to 5%) that lenders collect for processing, underwriting, and funding the loan. It compensates the lender for administrative and credit risk; it's deducted from your disbursement or added to the loan balance.
The origination fee is added to the principal, so you pay interest on a higher amount. A $100,000 loan with a 2% fee means you finance $102,000, increasing both your monthly payment and total interest. This is why effective APR is higher than the stated rate.
Stated APR is the interest rate quoted by the lender. Effective APR includes the impact of origination fees on your true borrowing cost. For example, 9% stated with a 2% fee may equal ~9.4% effective, showing the real cost of capital.
Yes. Many lenders offer fee waivers or reductions for strong credit, larger loans, or long-term relationships. Always negotiate and compare offers from multiple lenders before accepting a fee.
Consult your accountant, but generally, origination fees are capitalized (deducted over the life of the loan) rather than immediately deducted. Tax treatment depends on your business structure and loan purpose.
Flat-fee loans are easier to compare upfront. Percentage-based fees are more common. Convert flat fees to a percentage by dividing the fee by the principal, then use this calculator to compare scenarios side-by-side.