A commercial loan calculator uses some basic information about your loan to estimate the true cost of your loan, including both the principle (your loan amount) and interest.
You’ll need to input these loan details into your calculator:
- Loan amount
- Interest rate
- Repayment term (in months or years)
Then you can use the loan calculator to see how the total loan cost changes as those various factors change.
For example, let’s assume you’re considering a $300,000 commercial mortgage with an 8% interest rate. Using the loan calculator, you can see that a five-year repayment term makes the total loan cost $364,975.10. But a shorter term of three years changes the total to $338,432.75―saving you thousands of dollars.
A commercial loan calculator can also estimate your monthly payments. ($6,082.92 for the five-year term or $9,400.91 for the three-year term.)
It will even show you what percentage of your loan cost goes toward interest and what percentage goes toward the loan principle. (18% goes to interest with the five-year term, and 11% goes to interest with the three-year term.)
Plus, after you’ve done your basic calculation, a commercial mortgage calculator lets you view a loan amortization table. These tables show you how much each payment would cost you for the duration of your repayment term (the amortization period), as well as how much of each mortgage payment goes toward interest on the loan vs. the loan balance.
With these results, a loan calculator can help with all sorts of things, from estimating the total cost of a commercial property loan you’re applying for to comparing the costs of different types of commercial loans.
For example, you might use our commercial loan calculator for the following:
- Make sure you can afford the monthly payment on a loan
- See if a longer loan term makes more sense for your business
- Calculate the maximum interest rate you’re willing to pay
- Find the right combination of interest and repayment term
Put simply, a loan calculator can help you avoid any nasty surprises later on.