How church and charity loans work
Churches and charities borrow for buildings, refurbishments and other projects. Lenders include some banks and specialist charity and social lenders, often secured on the property.
Lenders look at how the repayments will be met, for example from regular giving, rental income or a fundraising campaign, and the charity's trustees are responsible for making sure the borrowing is affordable.
Worked example
Borrowing £150,000 at 6.5% over 15 years costs £1,306.66 a month, £235,198.99 in total.
Interest is worked out monthly at one twelfth of the annual rate. Lenders may calculate interest differently (some charge it daily), so your actual payments can differ slightly.
Trustee responsibilities
Trustees should check the charity's governing document allows borrowing and take appropriate advice, especially when the loan is secured on charity land.
Inputs for the church loan calculator
Amount to borrow
The amount the church or charity 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.
CALCULATOR QUESTIONS
Church loan calculator questions
Who lends to churches and charities?
Some banks and specialist charity or social lenders.
How will lenders judge affordability?
By how repayments will be met, such as regular giving, rental income or fundraising.
Who is responsible for the loan?
The charity, through its trustees, who must make sure borrowing is allowed and affordable.
Does this include fees?
No. Add any arrangement or legal fees from your offer.