How farm loan interest works
Interest is worked out each month on the balance you still owe, at one twelfth of the annual rate. Early payments are mostly interest; as the balance falls, more of each payment repays the loan.
Some agricultural lenders offer seasonal or annual repayments; the interest then depends on when you repay. This calculator assumes monthly repayments.
Worked example
Borrowing £40,000 at 8% over 5 years costs £8,663.35 in interest, £2,955.07 of it in the first year.
Planning for the year
Make sure repayments, including interest, are affordable through the farming year, not just after harvest.
Inputs for the agri loan interest calculator
Amount to borrow
The amount the farm business wants to borrow.
Interest rate (per year)
The annual interest rate on your loan. The rate shown is only an example, so enter the rate from your quote.
Term
How many years you'll repay over. A longer term means paying interest for longer.
CALCULATOR QUESTIONS
Agri loan interest calculator questions
How much interest is on a £40,000 farm loan?
At 8% over 5 years, £8,663.35.
Do seasonal repayments change the interest?
Yes. Repaying later in the year means interest builds on a higher balance for longer.
Why do I pay more interest at the start?
Interest is charged on the balance you owe, which is highest at the start. As you repay, it falls and so does the interest.
Does this include fees?
No. Add any fees to see the full cost.