What does a business loan cost a month?
On the defaults — a $50,000.00 loan at 7.5% over 5 years — the monthly payment is $1,001.90, the total paid is $60,114.00 and the total interest is $10,114.00. A business loan's monthly payment is set by three numbers — how much you borrow, the annual rate, and the term in years — and the payment formula is the standard amortizing-loan formula used by banks. Stretching the term cuts the monthly payment but raises the total interest, often by more than the payment you save.
Five things about the model are worth stating plainly. First, the monthly rate is the annual rate divided by 12 — 7.5% ÷ 12 = 0.625% — and the number of payments is the term in years times 12 — 5 × 12 = 60. Second, the payment is $50,000.00 × 0.00625 × (1.00625)^60 ÷ ((1.00625)^60 − 1) = $1,001.90. Third, the total paid is the payment times the number of payments — $1,001.90 × 60 = $60,114.00. Fourth, the total interest is the total paid minus the loan — $60,114.00 − $50,000.00 = $10,114.00. And fifth, the rate a lender quotes is usually an APR, and small rate differences move the payment by tens of dollars a month on a typical loan: at 5% the same loan costs $943.56 a month, at 10% it costs $1,062.35 a month; all listed in Accuracy & limitations.
The worked example, line by line
Setup: $50,000.00 loan, 7.5% annual rate, 5-year term.
Line 1 — the monthly rate and the number of payments. The monthly rate is 7.5% ÷ 12 = 0.625% (0.00625), and the number of payments is 5 × 12 = 60.
Line 2 — the factor. The factor (1 + 0.00625)^60 works out to about 1.4533.
Line 3 — the monthly payment. The payment is $50,000.00 × 0.00625 × 1.4533 ÷ (1.4533 − 1) = $1,001.90.
Line 4 — the total paid. The total paid is $1,001.90 × 60 = $60,114.00.
Line 5 — the total interest. The total interest is $60,114.00 − $50,000.00 = $10,114.00.
Line 6 — the flip. Stretch the term to 10 years and the payment falls to $593.51 a month, but the interest more than doubles to $21,221.20 — $11,107.20 more interest for $408.39 less a month.
The term trade-off, in numbers
| Term | Monthly payment | Total paid | Total interest |
|---|
| 3 years | $1,555.31 | $55,991.16 | $5,991.16 |
| 5 years | $1,001.90 | $60,114.00 | $10,114.00 |
| 10 years | $593.51 | $71,221.20 | $21,221.20 |
The same $50,000.00 at 7.5%: five extra years cut the payment by $408.39 a month but add $11,107.20 of interest — more than the whole loan is worth in payments saved. The payment falls fast at first and then flattens: the first two years off the term (from 5 to 3) cost $553.41 a month, while the next five years on (from 5 to 10) save only $408.39 a month. Short is dear per month and cheap overall; long is cheap per month and dear overall. Pick the shortest term whose payment the business can actually make.
Every branch, checked
$25,000 loan: Monthly payment $500.95, 60 payments, total paid $30,057.00, total interest $5,057.00 — Halving the loan halves the payment almost exactly: $500.95 is half of $1,001.90, and the interest halves to $5,057.00.
$100,000 loan: Monthly payment $2,003.79, 60 payments, total paid $120,227.40, total interest $20,227.40 — Doubling the loan doubles the payment almost exactly: $2,003.79 is twice $1,001.90, and the interest doubles to $20,227.40.
10% rate: Monthly payment $1,062.35, 60 payments, total paid $63,741.00, total interest $13,741.00 — A 10% rate adds $60.45 a month over the 7.5% default, and $3,627.00 of interest over five years.
5% rate: Monthly payment $943.56, 60 payments, total paid $56,613.60, total interest $6,613.60 — A 5% rate saves $58.34 a month against the default, and $3,500.40 of interest.
3-year term: Monthly payment $1,555.31, 36 payments, total paid $55,991.16, total interest $5,991.16 — A 3-year term costs $553.41 more a month but saves $4,122.84 of interest against the 5-year default.
10-year term: Monthly payment $593.51, 120 payments, total paid $71,221.20, total interest $21,221.20 — A 10-year term saves $408.39 a month but costs $11,107.20 more interest than the 5-year default.
$75,000 loan at 8% for 7 years: Monthly payment $1,168.97, 84 payments, total paid $98,193.48, total interest $23,193.48 — A $75,000 loan at 8% for 7 years costs $1,168.97 a month — $23,193.48 of interest over 84 payments.
The reverses, worked backwards
smallest loan amount whose DISPLAYED monthly payment reaches $1,000.00: The smallest loan amount whose DISPLAYED monthly payment reaches $1,000.00 is $49,905.06 (exact 49905.3082). At $49,905.06 the figures are Monthly payment $1,000.00, 60 payments, total paid $60,000.00, total interest $10,094.94. At $49,905.05 the payment is $999.99 — one cent of loan short of $1,000.00.
smallest annual rate (in 0.01% steps) whose DISPLAYED monthly payment reaches $900.00: The smallest annual rate (in 0.01% steps) whose DISPLAYED monthly payment reaches $900.00 is 3.08% (the exact root is 3.0704%). At 3.08% the figures are Monthly payment $900.21, 60 payments, total paid $54,012.60, total interest $4,012.60. At 3.07% the payment is $899.99 — below $900.00.
smallest whole number of years for the monthly payment to fall to $750.00 or less: The smallest whole number of years for the monthly payment to fall to $750.00 or less is 8 years. At 8 years the figures are Monthly payment $694.19, 96 payments, total paid $66,642.24, total interest $16,642.24. At 7 years the payment is $766.91 — above $750.00.
largest loan amount whose total interest stays at $10,000.00 or less: The largest loan amount whose total interest stays at $10,000.00 or less is $49,438.44 (exact 49437.1786). At $49,438.44 the figures are Monthly payment $990.64, 60 payments, total paid $59,438.40, total interest $9,999.96. At $49,438.45 the figures are Monthly payment $990.65, 60 payments, total paid $59,439.00, total interest $10,000.55 — above $10,000.00. The displayed interest is a sawtooth, not a smooth curve: it first passes $10,000.00 at $49,435.95 ($10,000.05), but because the monthly payment is rounded to the cent it falls back below $10,000.00 several times as the loan grows, so $49,438.44 — $1.26 above the exact root of $49,437.18 — is the largest loan that stays at or under $10,000.00 of interest.
loan amount for a monthly payment of exactly $1,500.00: The loan amount for a monthly payment of exactly $1,500.00 is $74,857.96 (exact to the cent). At $74,857.96 the figures are Monthly payment $1,500.00, 60 payments, total paid $90,000.00, total interest $15,142.04.
smallest whole number of months for the monthly payment to fall to $2,000.00 or less: The smallest whole number of months for the monthly payment to fall to $2,000.00 or less is 28 months. At 28 months the figures are Monthly payment $1,952.08, 28 payments, total paid $54,658.24, total interest $4,658.24. At 27 months the payment is $2,018.26 — above $2,000.00.
What the defaults assume
The defaults are Monthly payment $1,001.90, 60 payments, total paid $60,114.00, total interest $10,114.00. With $25,000 loan, Monthly payment $500.95, 60 payments, total paid $30,057.00, total interest $5,057.00 — Halving the loan halves the payment almost exactly: $500.95 is half of $1,001.90, and the interest halves to $5,057.00.. With $100,000 loan, Monthly payment $2,003.79, 60 payments, total paid $120,227.40, total interest $20,227.40 — Doubling the loan doubles the payment almost exactly: $2,003.79 is twice $1,001.90, and the interest doubles to $20,227.40.. With 10% rate, Monthly payment $1,062.35, 60 payments, total paid $63,741.00, total interest $13,741.00 — A 10% rate adds $60.45 a month over the 7.5% default, and $3,627.00 of interest over five years.. With 5% rate, Monthly payment $943.56, 60 payments, total paid $56,613.60, total interest $6,613.60 — A 5% rate saves $58.34 a month against the default, and $3,500.40 of interest.. With 3-year term, Monthly payment $1,555.31, 36 payments, total paid $55,991.16, total interest $5,991.16 — A 3-year term costs $553.41 more a month but saves $4,122.84 of interest against the 5-year default.. With 10-year term, Monthly payment $593.51, 120 payments, total paid $71,221.20, total interest $21,221.20 — A 10-year term saves $408.39 a month but costs $11,107.20 more interest than the 5-year default.. With $75,000 loan at 8% for 7 years, Monthly payment $1,168.97, 84 payments, total paid $98,193.48, total interest $23,193.48 — A $75,000 loan at 8% for 7 years costs $1,168.97 a month — $23,193.48 of interest over 84 payments.. With smallest loan amount whose DISPLAYED monthly payment reaches $1,000.00, $49,905.06 (exact 49905.3082) — at $49,905.06 the figures are Monthly payment $1,000.00, 60 payments, total paid $60,000.00, total interest $10,094.94; at the lower neighbor the figures are Monthly payment $999.99, 60 payments, total paid $59,999.40, total interest $10,094.35. With smallest annual rate (in 0.01% steps) whose DISPLAYED monthly payment reaches $900.00, 3.08% (exact 3.0704) — at 3.08% the figures are Monthly payment $900.21, 60 payments, total paid $54,012.60, total interest $4,012.60; at the lower neighbor the figures are Monthly payment $899.99, 60 payments, total paid $53,999.40, total interest $3,999.40. With smallest whole number of years for the monthly payment to fall to $750.00 or less, 8 years (exact 8) — at 8 years the figures are Monthly payment $694.19, 96 payments, total paid $66,642.24, total interest $16,642.24; at the lower neighbor the figures are Monthly payment $766.91, 84 payments, total paid $64,420.44, total interest $14,420.44. With largest loan amount whose total interest stays at $10,000.00 or less, $49,438.44 (exact 49437.1786) — at $49,438.44 the figures are Monthly payment $990.64, 60 payments, total paid $59,438.40, total interest $9,999.96; at the upper neighbor the figures are Monthly payment $990.65, 60 payments, total paid $59,439.00, total interest $10,000.55. With loan amount for a monthly payment of exactly $1,500.00, $74,857.96 (exact 74857.9623) — at $74,857.96 the figures are Monthly payment $1,500.00, 60 payments, total paid $90,000.00, total interest $15,142.04; at the lower neighbor the figures are Monthly payment $1,500.00, 60 payments, total paid $90,000.00, total interest $15,142.05. With smallest whole number of months for the monthly payment to fall to $2,000.00 or less, 28 months (exact 28) — at 28 months the figures are Monthly payment $1,952.08, 28 payments, total paid $54,658.24, total interest $4,658.24; at the lower neighbor the figures are Monthly payment $2,018.26, 27 payments, total paid $54,493.02, total interest $4,493.02. With $0 loan, Monthly payment $0.00, 60 payments, total paid $0.00, total interest $0.00 — A $0 loan has no payment, no total and no interest — the formula returns zeros.. With 0% rate, Monthly payment $833.33, 60 payments, total paid $49,999.80, total interest −$0.20 — At a 0% rate the payment is simply $50,000.00 ÷ 60 = $833.33, and 60 payments of $833.33 total $49,999.80 — twenty cents under the loan, because the payment is rounded to the cent. The interest is −$0.20, not $0.00.. With 1-year term, Monthly payment $4,337.87, 12 payments, total paid $52,054.44, total interest $2,054.44 — A 1-year term costs $4,337.87 a month — $2,054.44 of interest over 12 payments.. With $1,000,000 loan, Monthly payment $20,037.95, 60 payments, total paid $1,202,277.00, total interest $202,277.00 — A $1,000,000 loan costs $20,037.95 a month — $202,277.00 of interest.. With 20% rate, Monthly payment $1,324.69, 60 payments, total paid $79,481.40, total interest $29,481.40 — A 20% rate costs $1,324.69 a month — $29,481.40 of interest, nearly three times the default.. With $10,000 loan over 10 years, Monthly payment $118.70, 120 payments, total paid $14,244.00, total interest $4,244.00 — A $10,000 loan over 10 years costs $118.70 a month — $4,244.00 of interest.. With 0-year term, Term — whole years only, at least 1 year. — A 0-year term is not a loan — the calculator shows an error, not a result..
Output · formula · meaning
| Output | Formula | What it means |
|---|
| Loan amount | input | $50,000.00. |
| Annual rate | input | 7.5%. |
| Term | input | 5 years. |
| Monthly payment | P × r × (1+r)^n ÷ ((1+r)^n − 1) | $1,001.90. |
| Number of payments | term in years × 12 | 60. |
| Total paid | monthly payment × n | $60,114.00. |
| Total interest | total paid − loan amount | $10,114.00. |
| smallest loan amount whose DISPLAYED monthly payment reaches $1,000.00 | exact 49905.3082 | $49,905.06 → $49,905.06. |
| Below the smallest loan amount whose DISPLAYED monthly payment reaches $1,000.00 star | neighbor | Monthly payment $999.99, 60 payments, total paid $59,999.40, total interest $10,094.35. |
| Above the smallest loan amount whose DISPLAYED monthly payment reaches $1,000.00 star | neighbor | Monthly payment $1,000.00, 60 payments, total paid $60,000.00, total interest $10,094.93. |
| smallest annual rate (in 0.01% steps) whose DISPLAYED monthly payment reaches $900.00 | exact 3.0704 | 3.08% → 3.08%. |
| Below the smallest annual rate (in 0.01% steps) whose DISPLAYED monthly payment reaches $900.00 star | neighbor | Monthly payment $899.99, 60 payments, total paid $53,999.40, total interest $3,999.40. |
| Above the smallest annual rate (in 0.01% steps) whose DISPLAYED monthly payment reaches $900.00 star | neighbor | Monthly payment $900.44, 60 payments, total paid $54,026.40, total interest $4,026.40. |
| smallest whole number of years for the monthly payment to fall to $750.00 or less | exact 8 | 8 years → 8 years. |
| Below the smallest whole number of years for the monthly payment to fall to $750.00 or less star | neighbor | Monthly payment $766.91, 84 payments, total paid $64,420.44, total interest $14,420.44. |
| Above the smallest whole number of years for the monthly payment to fall to $750.00 or less star | neighbor | Monthly payment $638.05, 108 payments, total paid $68,909.40, total interest $18,909.40. |
| largest loan amount whose total interest stays at $10,000.00 or less | exact 49437.1786 | $49,438.44 → $49,438.44. |
| Below the largest loan amount whose total interest stays at $10,000.00 or less star | neighbor | Monthly payment $990.64, 60 payments, total paid $59,438.40, total interest $9,999.97. |
| Above the largest loan amount whose total interest stays at $10,000.00 or less star | neighbor | Monthly payment $990.65, 60 payments, total paid $59,439.00, total interest $10,000.55. |
| loan amount for a monthly payment of exactly $1,500.00 | exact 74857.9623 | $74,857.96 → $74,857.96. |
| Below the loan amount for a monthly payment of exactly $1,500.00 star | neighbor | Monthly payment $1,500.00, 60 payments, total paid $90,000.00, total interest $15,142.05. |
| Above the loan amount for a monthly payment of exactly $1,500.00 star | neighbor | Monthly payment $1,500.00, 60 payments, total paid $90,000.00, total interest $15,142.03. |
| smallest whole number of months for the monthly payment to fall to $2,000.00 or less | exact 28 | 28 months → 28 months. |
| Below the smallest whole number of months for the monthly payment to fall to $2,000.00 or less star | neighbor | Monthly payment $2,018.26, 27 payments, total paid $54,493.02, total interest $4,493.02. |
| Above the smallest whole number of months for the monthly payment to fall to $2,000.00 or less star | neighbor | Monthly payment $1,890.47, 29 payments, total paid $54,823.63, total interest $4,823.63. |
Who uses this
- The owner borrowing $50,000 for equipment: they learn the payment is $1,001.90 a month and the interest is $10,114.00 — and they check the 10-year branch to see the payment fall to $593.51.
- The owner comparing two rate quotes: they learn 5% costs $943.56 a month against $1,062.35 at 10% — and they check the 3.08% reverse to see the rate for a $900.00 payment.
- The owner stretching the term to fit cash flow: they learn 8 years is the smallest whole term for a payment of $750.00 or less — and they check the 28-month reverse to see the shortest term in months for a $2,000.00 payment.
- The owner borrowing less to keep the payment under $1,000: they learn $49,905.06 is the smallest loan whose displayed payment reaches $1,000.00 — and they check the $74,857.96 reverse to see the loan for a $1,500.00 payment.
Accuracy & limitations
The model is the standard amortizing-loan formula: the monthly payment is the loan times the monthly rate times (1 + monthly rate)^n divided by ((1 + monthly rate)^n − 1), rounded to cents first; the total paid is the rounded payment times the number of payments, and the total interest is the total paid minus the loan. What the calculator cannot do is price your loan: most small-business loans run 3–10 years, with SBA loans sometimes running longer, and the rate a lender quotes is usually an APR — fees, origination charges, variable rates and prepayment penalties are not in the formula, so the payment a lender quotes can differ by a few dollars. At a 0% rate the payment is simply the loan divided by the number of payments, and because the payment is rounded to the cent, 60 payments of $833.33 total $49,999.80 — twenty cents under the loan. And a lender also looks at the business's cash flow, not just the payment — the payment has to fit what the business actually brings in each month, so check the payment against monthly cash flow before you sign.
Cite this calculatorBright Side Kit. “Business Loan Calculator: Payment, Interest & Total” brightoolbox.com, 2026. Method: Monthly payment M = P × r × (1+r)^n ÷ ((1+r)^n − 1), where r is the annual rate ÷ 12 and n is the term in years × 12; total paid = monthly payment × n; total interest = total paid − loan amount; at a 0% rate the payment is loan ÷ n. Reverses: smallest loan amount whose DISPLAYED monthly payment reaches $1,000.00 is $49,905.06 (at $49,905.06 the figures are Monthly payment $1,000.00, 60 payments, total paid $60,000.00, total interest $10,094.94; at the lower neighbor the figures are Monthly payment $999.99, 60 payments, total paid $59,999.40, total interest $10,094.35); smallest annual rate (in 0.01% steps) whose DISPLAYED monthly payment reaches $900.00 is 3.08% (at 3.08% the figures are Monthly payment $900.21, 60 payments, total paid $54,012.60, total interest $4,012.60; at the lower neighbor the figures are Monthly payment $899.99, 60 payments, total paid $53,999.40, total interest $3,999.40); smallest whole number of years for the monthly payment to fall to $750.00 or less is 8 years (at 8 years the figures are Monthly payment $694.19, 96 payments, total paid $66,642.24, total interest $16,642.24; at the lower neighbor the figures are Monthly payment $766.91, 84 payments, total paid $64,420.44, total interest $14,420.44); largest loan amount whose total interest stays at $10,000.00 or less is $49,438.44 (at $49,438.44 the figures are Monthly payment $990.64, 60 payments, total paid $59,438.40, total interest $9,999.96; at the upper neighbor the figures are Monthly payment $990.65, 60 payments, total paid $59,439.00, total interest $10,000.55); loan amount for a monthly payment of exactly $1,500.00 is $74,857.96 (at $74,857.96 the figures are Monthly payment $1,500.00, 60 payments, total paid $90,000.00, total interest $15,142.04; at the lower neighbor the figures are Monthly payment $1,500.00, 60 payments, total paid $90,000.00, total interest $15,142.05); smallest whole number of months for the monthly payment to fall to $2,000.00 or less is 28 months (at 28 months the figures are Monthly payment $1,952.08, 28 payments, total paid $54,658.24, total interest $4,658.24; at the lower neighbor the figures are Monthly payment $2,018.26, 27 payments, total paid $54,493.02, total interest $4,493.02) Bright Side Kit. "Business Loan Calculator: Payment, Interest & Total" https://brightoolbox.com/business-loan-calculator/ Accessed October 26, 2026.
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Frequently asked questions
How do I calculate a business loan payment?
Use the amortizing-loan formula. The monthly payment is $50,000.00 × 0.00625 × (1.00625)^60 ÷ ((1.00625)^60 − 1) = $1,001.90 for a $50,000.00 loan at 7.5% over 5 years — 60 payments, $60,114.00 in total, $10,114.00 of interest.
What is the monthly payment on a $50,000 business loan?
$1,001.90 a month at 7.5% over 5 years. The total paid is $60,114.00 and the total interest is $10,114.00. At 5% the same loan costs $943.56 a month; at 10% it costs $1,062.35 a month.
How much interest will I pay on a $50,000 business loan?
$10,114.00 over 5 years at 7.5%. Stretch it to 10 years and the interest more than doubles to $21,221.20, even though the payment falls to $593.51 a month.
What loan amount gives a $1,000 a month payment?
$49,905.06. At $49,905.06 the displayed payment is $1,000.00; at $49,905.05 it is $999.99 — one cent of loan short.
What rate gives a $900 a month payment?
3.08%. At 3.08% the displayed payment is $900.21; at 3.07% it is $899.99 — below $900.00. The exact root is 3.0704%.
How long a term do I need for a $750 a month payment?
8 years. At 8 years the payment is $694.19; at 7 years it is $766.91 — above $750.00. In months, 28 months is the smallest whole term for a payment of $2,000.00 or less: $1,952.08, against $2,018.26 at 27 months.
What happens at a 0% rate?
The payment is the loan divided by the number of payments. $50,000.00 ÷ 60 = $833.33, and 60 payments of $833.33 total $49,999.80 — twenty cents under the loan, because the payment is rounded to the cent.
What loan amount gives a $1,500 a month payment?
$74,857.96. At $74,857.96 the displayed payment is $1,500.00; the exact loan for a $1,500.00 payment is $74,857.9623.