Business Loan Refinance Rates Calculator

A business loan refinance rates calculator estimates the monthly payment and total interest on a replacement loan from its amount, APR, and term; it does not determine a lender’s offered rate. Enter the proposed refinance loan amount, annual percentage rate, and term to see the payment and total interest under a fixed-rate monthly-payment model.

Formula

The calculator treats the new loan as a fixed-rate loan with equal monthly payments. It first finds the monthly payment using the standard amortizing-loan formula, rounds that payment to cents, then estimates total interest as all scheduled payments minus the amount borrowed.

Monthly payment = round(P × r ÷ [1 − (1 + r)⁻ⁿ], 2), where r = APR ÷ 1,200 and n = years × 12. Total interest = monthly payment × n − P.

• P is the proposed refinance principal, in dollars.
• APR is the annual percentage rate entered as a percentage, such as 8 for 8% per year.
• r is the monthly interest rate as a decimal.
• n is the number of monthly payments.
• 2 in the payment formula means the payment is rounded to two decimal places.

The first result is the estimated monthly payment. Total interest is based on that rounded payment multiplied by the full term. Actual lender schedules may differ because of payment dates, fees, rate structure, rounding practices, or other contract terms.

Worked Example

Using the calculator’s defaults: P = $20,000, APR = 8%, and term = 5 years.

1. Convert the annual rate to a monthly decimal: r = 8 ÷ 1,200 = 0.0066667.
2. Convert the term to monthly payments: n = 5 × 12 = 60.
3. Substitute into the payment formula: $20,000 × 0.0066667 ÷ [1 − (1.0066667)⁻⁶⁰] = $405.53 after rounding to cents.
4. Calculate total interest using the rounded payment: $405.53 × 60 − $20,000 = $4,331.80.

For these inputs, the estimated monthly payment is $405.53, and estimated total interest over 60 payments is $4,331.80.

Assumptions

• The interest rate is fixed for the full term.
• Payments are level, made monthly, and begin on a regular schedule.
• Interest compounds monthly at APR divided by 12.
• The calculation excludes origination or closing fees, taxes, insurance, escrow, prepayment charges, and any other costs because there are no inputs for them.

Using the Calculator for a Refinance

Enter the amount of the proposed replacement loan, not automatically the original amount borrowed. A refinance balance may include the payoff amount on existing debt and, depending on the agreement, fees or other amounts financed. The lender’s payoff statement and proposed loan disclosure are the sources for those figures; do not assume that the current principal balance is the exact amount needed to pay off a loan.

Then enter the proposed APR and term quoted for the replacement loan. APR is an annualized rate expressed as a percentage, not a monthly rate. The calculator converts it to a monthly rate internally. Use the actual offer terms when available; the 8% default is only an example, not a statement about rates available to businesses.

Compare results carefully if you run more than one scenario. A longer term can reduce the modeled monthly payment while increasing the number of payments, and therefore may increase total interest. A lower payment alone does not establish that refinancing reduces the full cost: compare the old loan’s remaining scheduled costs with the replacement loan’s total payments and any fees, using equivalent dates and payoff amounts.

What the Results Do—and Do Not—Show

The monthly payment is a mathematical estimate for principal and interest under the inputs. Total interest is the modeled interest across all scheduled payments, calculated after rounding each monthly payment to cents. Because the calculator assumes every payment is identical, its total may not match a lender’s final amortization schedule exactly.

This is not a calculator for discovering a refinance rate. It cannot infer an APR from a business’s finances, determine whether a lender will make an offer, or account for variable-rate changes. Rates, fees, and loan terms must come from the lender’s written quote. If the proposed loan has a variable rate, irregular payments, interest-only period, balloon payment, or deferred payments, this standard formula will not represent the full contract.

Common Comparison Problems and Alternatives

• Ignoring fees: A fee paid upfront affects the refinance’s cost even if it does not change the monthly payment. If fees are added to the principal, include them in the loan amount only when the offer actually finances them.
• Comparing different payoff dates: Existing debt continues to accrue interest until paid. Use payoff figures dated for a comparable point in time.
• Focusing only on the payment: Compare total remaining outlay, term, fees, and any prepayment costs—not just the new monthly amount.
• Mixing up APR and monthly rates: Enter an annual percentage such as 8, not 0.6667; the calculator performs the annual-to-monthly conversion.

For a more complete comparison, obtain a written payoff amount for the current loan and a full payment schedule or disclosure for the proposed loan. A separate cash-flow projection can help show when payments occur, while a fee-inclusive comparison can account for costs not represented in this calculator. Those checks require contract details and are not supplied by the formula here.

Frequently Asked Questions

Does this calculator tell me the business refinance rate I can get?
No. It calculates payment and interest from an APR you enter. Only a lender can provide the rate and terms in an offer.

Should I enter my current balance or the payoff amount?
For a proposed refinance scenario, use the amount being borrowed under the new agreement. A lender’s dated payoff figure can differ from the balance shown on a statement because of accrued interest or other contract amounts.

Why can a longer term have a lower payment but more interest?
The principal is spread across more monthly payments. This can reduce each scheduled payment, while interest accrues over a longer period; the calculator displays the resulting total under its assumptions.

Does the result include refinance fees?
No. There is no fee input. Include financed fees in the principal only if they are actually added to the new loan, and separately account for costs paid outside it.

Can I use it for a variable-rate or interest-only loan?
Not reliably. The formula assumes a fixed APR and equal monthly principal-and-interest payments from the start. Those other structures need their own payment schedules and contract terms.

This result is an estimate; the lender’s disclosure gives the exact figures.

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in p | Loan amount | $ | 20000 | 1 | 100000000
in apr | Interest rate (APR) | % | 8 | 0.01 | 100
in yrs | Loan term | years | 5 | 0.0833 | 50
out pmt | Monthly payment | $ | round(p * (apr / 1200) / (1 - (1 + apr / 1200) ^ -(yrs * 12)), 2) | 2
out int | Total interest | $ | pmt * yrs * 12 - p | 2