Revolving Term Loan Calculator: Payments and Interest

A revolving term loan combines a reusable credit line with a later repayment period. This calculator estimates the fixed monthly payment and total interest for a single balance repaid over a set term; enter the balance, APR, and term to see the results.

Formula

The calculator treats the entered amount as a balance converted to a fully amortizing loan with equal monthly payments. It uses the standard fixed-payment formula:

Payment = round[P × r ÷ (1 − (1 + r)⁻ⁿ), 2]

• P is the starting loan balance in dollars.
• r is the monthly interest rate, calculated as APR ÷ 1,200. The APR is entered as a percentage per year.
• n is the number of monthly payments, calculated as years × 12.
• Payment is the estimated monthly payment in dollars, rounded to cents.

Total interest is estimated as monthly payment × number of payments − starting balance. Since the monthly payment is rounded to cents before this total is calculated, the result reflects that rounded payment rather than an unrounded theoretical payment.

Worked Example

Using the calculator’s defaults: a $20,000 balance, 8% APR, and a five-year term:

1. Convert the APR to a monthly rate: 8 ÷ 1,200 = 0.0066667.
2. Convert the term to payments: 5 × 12 = 60 months.
3. Apply the payment formula: $20,000 × 0.0066667 ÷ [1 − (1 + 0.0066667)⁻⁶⁰] = approximately $405.53 per month after cent rounding.
4. Calculate total interest using the rounded payment: $405.53 × 60 − $20,000 = $4,331.80.

The calculator therefore displays an estimated monthly payment of $405.53 and estimated total interest of $4,331.80.

Assumptions

• The APR and payment amount remain fixed throughout the modeled term.
• Payments are made monthly at the end of each period.
• Interest is compounded monthly using APR divided by 12.
• The calculation excludes fees, taxes, insurance, and other charges.
• No additional borrowing, repayments, rate changes, or missed payments occur.

What a Revolving Term Loan Means

A revolving term loan is a financing arrangement with two distinct features. During a revolving or draw period, the borrower may draw funds, repay some or all of the balance, and potentially borrow again up to an agreed credit limit. After that period ends, the account generally enters a repayment phase in which the outstanding amount is repaid under the contract’s terms. The exact structure, access to further draws, interest calculation, and payment requirements depend on the agreement.

“Revolving” describes the ability to reuse available credit; “term” refers to a defined period for repayment or maturity. This is different from a conventional installment loan, where the borrower usually receives a set amount once and repays it through scheduled installments. It is also different from an open-ended revolving account that may not convert to a defined amortizing repayment schedule. Product names and contract details vary, so the agreement—not the label—determines how a particular facility works.

How the Calculator Relates to the Loan

The calculator models only the repayment arithmetic for one balance, as though it were a fixed-rate installment loan. It does not simulate the revolving period itself. In particular, it cannot determine how much credit remains available, how future draws change the balance, or what the lender will require during the draw period.

For example, if a borrower has $20,000 outstanding when repayment begins, the calculator estimates a level payment for that balance and the entered term. If another $3,000 is drawn later, or if the rate is variable, the estimate no longer represents the full account. Re-enter the applicable balance, rate, and repayment term for a new simplified estimate, while recognizing that actual billing may use different rules.

What to Check in the Agreement

Before interpreting an estimate, identify which balance and repayment terms the contract actually uses. Useful details to confirm include:

• Whether the interest rate is fixed or variable, and how the contract defines changes.
• When the revolving draw period ends and whether new draws stop at that point.
• How the repayment period is calculated and whether payments are level, interest-only, or otherwise structured.
• Whether fees or other charges are added to the balance or billed separately.
• How payment dates, late payments, and extra payments affect the schedule.

The APR entered here should be the relevant rate for the modeled balance and period. APR conventions and the treatment of fees can differ from the rate used to accrue interest, so consult the lender’s disclosures for the figures and definitions that apply to the account.

Limits and Common Misunderstandings

A frequent misconception is that a calculator can predict the payment on any revolving facility from the credit limit. It cannot: the amount borrowed, repayment rules, rate, and timing matter. This tool uses the outstanding balance as its “loan amount,” not the maximum credit line. Entering a limit that is larger than the actual balance would overstate the modeled principal.

The estimate also assumes a fixed rate and regular monthly payments. A variable rate, daily balance method, irregular payment dates, fees, or additional borrowing can make actual interest and payments differ. The final payment may also differ slightly because real schedules can adjust for rounding or timing. This is educational arithmetic, not an approval, affordability, or credit-limit calculation.

Frequently Asked Questions

Is a revolving term loan the same as a line of credit?
A revolving term loan may provide a line of credit during a draw period, but it also has a defined repayment or maturity structure. The contract determines whether and when borrowing access ends.

Can I borrow again after repayment starts?
That depends on the agreement. Some facilities end or restrict further draws after the revolving period, while others may specify different terms. Check the contract rather than assuming unused credit remains available.

Does this calculator include the revolving period?
No. It estimates level payments and interest for one balance over the repayment term. It does not model draws, repayments during the draw period, changing rates, or account-specific billing methods.

Should I enter the credit limit or the amount owed?
Enter the balance being modeled—the amount outstanding at the start of the repayment schedule—not the total credit limit, unless they are the same.

Why might the lender’s payment differ?
The agreement may use a different rate, payment method, term, compounding convention, fee treatment, balance, or payment timing. The result is an estimate and the lender’s disclosure gives the exact figures.

Related

• UC Extra Payments Calculator and How It Works
• Refinance vs Extra Payments Calculator
• Extra Principal Payments: How They Change Loan Costs

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