Business Loan APR Calculator with Extra Payments
This calculator estimates the scheduled payment, payoff timing, total paid, and interest paid for a business loan and shows how recurring extra payments and/or a one-time lump-sum payment change those outcomes. It is intended for planning and comparison, not as a legally binding APR disclosure.
Results assume a fixed-rate, fully amortizing loan with payments at a constant frequency. When you apply extra payments the tool recomputes the effective payoff schedule and estimates cumulative interest savings relative to the scheduled amortization.
Apply a recurring extra payment starting after an optional delay and a one-time lump-sum at a specified payment. Estimates payoff timing and savings.
Inputs
Results
Balance after lump-sum
$49,301.61
Estimated remaining payments after lump-sum
59
Estimated total interest
$9,403.60
Interest saved vs scheduled
$0.00
| Output | Value | Unit |
|---|---|---|
| Balance after lump-sum | $49,301.61 | currency |
| Estimated remaining payments after lump-sum | 59 | periods |
| Estimated total interest | $9,403.60 | currency |
| Interest saved vs scheduled | $0.00 | currency |
Visualization
Methodology
The tool computes a periodic interest rate by dividing the annual APR by the number of payments per year. For scheduled payments it uses the standard annuity formula to compute the periodic payment that amortizes the loan over the stated term.
When recurring extra payments are applied, the calculator treats the extra amount as added to each periodic payment and computes the number of periods until the balance reaches zero using closed-form algebraic formulas for an amortizing loan (logarithmic solution). For a lump-sum paydown, the balance immediately post-payment is computed and remaining periods are re-derived using the annuity relations.
This estimate models interest accrual by period and assumes payments are applied at the scheduled interval with extras applied as specified. It does not simulate arrears, fees, deferred interest, variable rates, payment holidays, or lender-specific application order rules.
Key takeaways
Use the baseline method to see scheduled amortization. Use recurring, lump-sum, or combined methods to compare how extra payments reduce payoff time and interest.
This tool provides planning estimates. For lender-provided payoff quotes, contact your loan servicer to get exact balances and payoff instructions.
Further resources
Expert Q&A
Is this calculator producing the legally required APR used for consumer disclosures?
No. This tool estimates amortization and effective payoff impacts from extra payments. Legal APR disclosures (Truth in Lending Act / similar) may require inclusion of fees and specific rounding and must follow regulatory methods used by lenders and regulators.
How accurate are the payoff estimates when I add extra payments?
Estimates use closed-form amortization formulas and assume payments and extras are applied exactly as entered. Minor differences can occur due to rounding, lender-specific interest accrual conventions, payment application order, and timing adjustments.
What inputs should I check to ensure reasonable results?
Confirm the APR, payment frequency, term length, and whether your lender compounds interest at the same frequency. Ensure recurring extra amounts and lump sums reflect how and when you will actually pay them.
Are there limits on inputs?
This tool assumes positive principal and non-negative APR. Extremely small payments that do not cover per-period interest may produce very long or effectively indefinite payoff estimates; the tool flags such cases by returning large payoff values.
Sources & citations
- National Institute of Standards and Technology (NIST) - Engineering and calculation best practices — https://www.nist.gov
- International Organization for Standardization (ISO) — https://www.iso.org
- IEEE - Numerical methods and floating point considerations — https://www.ieee.org
- Occupational Safety and Health Administration (OSHA) - general guidance for controls and calibration programs — https://www.osha.gov