How paying off a business loan early works
The calculator keeps your normal monthly payment the same and adds your overpayments, so the loan is paid off sooner. It works month by month, charging interest at one twelfth of the annual rate on what you still owe.
Business loans often have early repayment or prepayment fees, and some charge a fixed amount of interest whatever you repay. Check how your agreement works before you overpay.
Worked example
On £50,000 at 9% with 5 years left, the normal payment is £1,037.92 a month. Paying £250 a month extra saves £2,957.58 in interest and clears the loan 1 year 1 month sooner.
Paying £500 a month extra instead saves £4,746.52 and 1 year 10 months. A one-off £5,000 lump sum now saves £2,642.62 and 7 months.
Cash flow first
Paying off debt early saves interest, but it also takes cash out of the business. Make sure you keep enough working capital for wages, stock and unexpected costs.
Inputs for the business loan payoff calculator
Amount you owe
The balance left on your business loan.
Interest rate (per year)
Your current interest rate.
Time left to repay
How many years are left on the loan.
Extra each month
The amount you'll pay on top of your normal payment each month. Enter 0 for none.
One-off lump sum now
A single overpayment made now. Enter 0 for none.
CALCULATOR QUESTIONS
Business loan payoff calculator questions
Can I pay off a business loan early?
Usually, though many business loans have an early repayment fee. Check your agreement.
How much would £250 a month extra save?
On £50,000 at 9% with 5 years left, £2,957.58 and 1 year 1 month.
Should I use spare cash to pay off the loan?
Only if the business can spare it. Weigh the interest saved against keeping working capital.
Will my lender charge me for overpaying?
It depends on your agreement. Check for early repayment or settlement charges before you overpay.