Business Loan Calculator UK
Calculate UK business loan costs accurately. Understand your monthly payments and total interest with British lending rates and fees.
How the Business Loan Calculator UK works
Enter your loan amount in pounds, UK interest rate, loan term, and any arrangement fees. See your monthly payment, total interest, and true APR including all British lending fees.
UK business loans have specific fees and terms. This calculator handles British lending rules so you know exactly what you’ll pay over the loan term.
How it works
Tutorial
UK business loans include arrangement fees, valuation costs, and other charges that increase your total cost. This guide shows you the complete picture so you can compare offers accurately.
You have two options: use the calculator above for instant UK loan analysis, or follow this guide to calculate loan costs manually.
The Formula
| What to Calculate | How to Calculate It |
|---|---|
| Monthly Payment | Use loan payment formula with monthly rate |
| Total Interest | (Monthly Payment × Number of Months) – Loan Amount |
| True APR | Annual rate including all fees |
Step-by-Step Example
Let’s calculate costs for a £50,000 loan at 7.5% over 5 years.
Step 1: Calculate Monthly Payment
Find your regular payment amount:
| Loan Details | Amount |
|---|---|
| Loan Amount | £50,000 |
| Interest Rate | 7.5% per year |
| Loan Term | 5 years (60 months) |
| Monthly Rate | 0.625% |
| Monthly Payment | £1,001 |
Calculation:Monthly rate is 7.5% ÷ 12 =0.625%
Step 2: Calculate Total Cost
Add up everything you’ll pay:
| What You Pay | Amount |
|---|---|
| 60 Monthly Payments (£1,001 × 60) | £60,060 |
| Minus: Original Loan | -£50,000 |
| Interest You’ll Pay | £10,060 |
| Arrangement Fee (2% of loan) | £1,000 |
| Valuation Fee | £500 |
| Legal Fees | £750 |
| Total Extra Cost Beyond Loan | £12,310 |
Calculation:£10,060 + £1,000 + £500 + £750 =£12,310
Step 3: Calculate True Annual Rate
Find the real rate including all fees:
| What to Calculate | Amount |
|---|---|
| Money You Actually Get (£50,000 – £2,250 fees) | £47,750 |
| Total You Pay Back (£1,001 × 60) | £60,060 |
| True APR (including fees) | 8.9% |
Final Answer:True cost is8.9%, not the advertised 7.5%
What This Means
Fees add 1.4% to your rate, making the loan more expensive than advertised. In the UK, loan interest is tax deductible, reducing your after-tax cost by 19-25% depending on your corporation tax rate.
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