Business Loan Interest Calculator with Extra Payments
This calculator projects a business loan amortization schedule and shows the effect of recurring extra payments or a one-time lump-sum prepayment. It produces scheduled payment amounts, expected payoff timing, and comparative totals to help you evaluate cashflow and interest savings.
Use the calculator to compare 'what-if' scenarios: add recurring extra payments, schedule a one-time prepayment, or combine both. Results are estimates and are intended for planning, not as a legally binding payoff statement.
Projection that supports recurring extra payments and single lump-sum prepayments. Uses discrete-payment math with standard amortization formulas to estimate remaining balance, payoff timing and interest saved. Handles common edge cases such as extra payments that fully pay the balance early.
Inputs
Advanced inputs
Recurring extra payment details
One-time lump-sum prepayment details
Results
Scheduled payment (no extras)
$978.31
Effective payment (including recurring extra when applicable)
$978.31
Total payments to repay (with extras)
60
Total interest (with extras)
$8,698.44
Interest saved
—
Payments saved
-0
| Output | Value | Unit |
|---|---|---|
| Scheduled payment (no extras) | $978.31 | currency |
| Effective payment (including recurring extra when applicable) | $978.31 | currency |
| Total payments to repay (with extras) | 60 | payments |
| Total interest (with extras) | $8,698.44 | currency |
| Interest saved | — | currency |
| Payments saved | -0 | payments |
Visualization
Methodology
Periodic-rate amortization formulas are used. Periodic interest rate is calculated as annual_rate / 100 / payments_per_year. The standard fixed-payment formula computes the scheduled payment that amortizes the loan over its term.
For recurring extras, the effective payment (scheduled payment plus recurring extra) is used in the closed-form repayment formula derived from the geometric progression of remaining balances. For a single lump-sum prepayment, the remaining balance before the prepayment is computed, the lump-sum reduces principal, and remaining payments are recomputed assuming the effective payment thereafter.
Edge cases are handled conservatively: if an extra payment fully repays the loan before the next scheduled payment, the model clamps the remaining balance to zero and counts only the payments required to reach zero. Where formulas would divide by zero or produce non-finite results, the calculator falls back to the original schedule.
Worked examples
Example 1: $50,000 loan, 6.5% APR, 5 years, monthly payments. Adding $200 monthly recurring extra reduces both total interest and number of payments — results shown in the outputs.
Example 2: Same loan with a $5,000 lump-sum after 12 payments. The calculator shows the remaining balance at payment 12, applies the lump-sum, and estimates remaining payments and interest thereafter.
Key takeaways
This tool gives quick, transparent estimates of how extra payments affect interest and payoff timing. It is intended for planning and comparison.
Always verify payoff amounts with your lender because this calculator assumes no fees, no changes to APR, and interest computed on the nominal schedule provided.
Further resources
Expert Q&A
Are these results exact payoff figures from my lender?
No. Results are estimates. Lenders may apply different interest day-count conventions, fees, or timing rules. Use the calculator for planning and confirm final payoff numbers with your lender.
Do extra payments always reduce interest and term?
Yes, if extras are applied to principal they reduce principal and therefore interest accrual. The magnitude of savings depends on timing, amount, and whether the lender applies prepayments to principal immediately.
What assumptions does the calculator make?
Assumes fixed nominal APR, fixed scheduled payment frequency, extras applied immediately to principal on the indicated payment date, and no prepayment penalties or additional fees. Does not model interest capitalization beyond standard amortization.
How should I enter biweekly or weekly payments?
Select the payments-per-year option matching your schedule. The tool treats each payment as an equal period; for biweekly select 26 and for weekly select 52.
How accurate are the formulas for very large or very small interest rates?
Standard closed-form amortization formulas are numerically robust for normal commercial loan rates. For extremely small r values or extremely large n values, floating-point rounding can introduce small errors; see accuracy caveats below.
Sources & citations
- IEEE Standard for Floating-Point Arithmetic (IEEE 754) — https://standards.ieee.org/standard/754-2019.html
- NIST — Software Testing and Validation Guidance — https://www.nist.gov
- ISO 9001 — Quality Management Systems — https://www.iso.org/iso-9001-quality-management.html
- OSHA — Occupational Safety and Health Administration — https://www.osha.gov