What is amortization?

Amortization is the process of spreading out a loan into a series of fixed payments over time. Each payment consists of both principal and interest. In the beginning, a larger portion of the payment goes toward interest, and as the loan matures, a larger portion goes toward paying down the principal.

What is the difference between APR and interest rate?

The interest rate is the cost of borrowing the money, expressed as a percentage. The Annual Percentage Rate (APR) is a broader measure that includes the interest rate plus any lender fees, origination fees, or other costs associated with the loan. APR gives you a more complete picture of the loan's true cost.

Can I make extra payments on my business loan?

Most business loans allow for prepayments, which can help you pay off the loan faster and save on total interest. However, you must check your loan agreement for any 'prepayment penalties.' This calculator assumes no prepayments are made.

How is this different from a simple interest loan?

This calculator uses an amortizing formula, where interest is calculated on the *remaining balance* of the loan. A simple interest loan calculates interest based on the *original principal* for the entire loan term, which is less common for standard business term loans.

What information do I need to apply for a business loan?

Lenders typically require a detailed business plan, personal and business financial statements (like balance sheets and income statements), tax returns, bank statements, and legal documents (like articles of incorporation). Use this calculator to model different scenarios before you apply.

Business Loan Calculator - Calculate Payments & Amortization

Audit: Complete

Formula (LaTeX) + variables + units

This section shows the formulas used by the calculator engine, plus variable definitions and units.

Formula (extracted LaTeX)

\[', right: '\]

', right: '

Formula (extracted LaTeX)

\[M = P \frac{i(1 + i)^n}{(1 + i)^n - 1}\]

M = P \frac{i(1 + i)^n}{(1 + i)^n - 1}

Formula (extracted LaTeX)

\[M = 50,000 \frac{0.00625(1 + 0.00625)^{60}}{(1 + 0.00625)^{60} - 1}\]

M = 50,000 \frac{0.00625(1 + 0.00625)^{60}}{(1 + 0.00625)^{60} - 1}

Formula (extracted LaTeX)

\[M = 50,000 \frac{0.00625(1.45329...)}{(1.45329...) - 1}\]

M = 50,000 \frac{0.00625(1.45329...)}{(1.45329...) - 1}

Formula (extracted LaTeX)

\[M = 50,000 \frac{0.009083...}{0.45329...}\]

M = 50,000 \frac{0.009083...}{0.45329...}

Formula (extracted LaTeX)

\[M = 50,000 \times 0.020038...\]

M = 50,000 \times 0.020038...

Formula (extracted text)

$ M = P \frac{i(1 + i)^n}{(1 + i)^n - 1} $

Variables and units

P = principal (loan amount) (currency)
r = periodic interest rate (annual rate ÷ payments per year) (1)
n = total number of payments (years × payments per year) (count)
M = periodic payment for principal + interest (currency)
T = property tax (annual or monthly depending on input) (currency)

Sources (authoritative):

Home — calcdomain.com · Accessed 2026-01-19
https://calcdomain.com/
Finance — calcdomain.com · Accessed 2026-01-19
https://calcdomain.com/finance
Business & Small Biz — calcdomain.com · Accessed 2026-01-19
https://calcdomain.com/subcategories/business-small-biz
SBA Loan Calculator — calcdomain.com · Accessed 2026-01-19
https://calcdomain.com/sba-loan-calculator
Startup Costs Calculator — calcdomain.com · Accessed 2026-01-19
https://calcdomain.com/startup-costs
Business Valuation Calculator — calcdomain.com · Accessed 2026-01-19
https://calcdomain.com/business-valuation-calculator
Profit Margin Calculator — calcdomain.com · Accessed 2026-01-19
https://calcdomain.com/profit-margin-calculator

Changelog

Version: 0.1.0-draft
Last code update: 2026-01-19

0.1.0-draft · 2026-01-19

Initial audit spec draft generated from HTML extraction (review required).
Verify formulas match the calculator engine and convert any text-only formulas to LaTeX.
Confirm sources are authoritative and relevant to the calculator methodology.

Verified by Ugo Candido on 2026-01-19
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