Term Loan APR Calculator
The easiest way to think of online term loans is that they are “bank loans reimagined for the digital age.”
Compared to bank loans, the application process is a lot more pleasant. The interest rates are higher than what banks would offer but it’s more accessible and convenient. Some common term loan providers are Funding Circle, Dealstruck, and Fundation. Learn more about term loans and read lender reviews in our free ebook, The Ultimate Guide to Financing Your Business in 2017. Download here.
When you get a term sheet for a term loan, you will likely be quoted an interest rate, repayment term (between 1-5 years), and other associated fees, such as an origination fee or monthly administration fee. First calculate the dollar amount of the added fees, then plug your terms into the calculator below to find out the true cost of your loan offer.
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Term Loan Offers
Business Loan Calculator Definitions
- Loan Amount
- The loan amount should be easy for you to spot — it’s the total amount the lender is offering to your business.
- Interest Rate
- The interest rate is the percentage that will be charged on the amount of money you borrow from the lender. You may have heard “APR” and “interest rate” used interchangeably, but they’re not the same thing. The APR looks at the entirety of the loan cost, including fees. That’s why it’s so important to use a business loan calculator to find out your APR — it helps you examine loan terms with different fees to make an apples to apples comparison and get the lowest-cost option that’s best for you.
- Origination & Application Fees
- An origination fee is charged by the lender as an upfront cost of processing, underwriting and issuing the loan. Application fees help cover the cost a lender incurs to check your personal and/or business credit, do a background check, etc.
- Loan Term
- The loan term is essentially the length of your loan. For business term loans, this is often expressed in months since the repayment term is shorter than other term loans, like the popular 30-year mortgage.
- Monthly Servicing Charge
- A lender may ask you to pay a monthly fee to service your loan. This fee is applied toward ongoing lender costs, similar to the origination fee.
This article was originally written on October 13, 2015 and updated on December 13, 2021.