How commercial vehicle 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.
Lenders may calculate interest differently (some charge it daily), so your actual interest can differ slightly.
Worked example
Financing £27,000 for a £30,000 van at 9% over 48 months costs £671.90 a month and £5,251.01 in interest.
Interest and tax
For businesses, finance interest on a vehicle used for business is generally an allowable expense. Check how your agreement is treated with your accountant.
Inputs for the commercial vehicle loan interest rate calculator
Vehicle price
The price of the van, truck or other vehicle.
Deposit
What you're paying upfront. Borrowing less means paying less interest.
Interest rate (per year)
The annual interest rate on your finance. The rate shown is only an example, so enter the rate from your quote.
Term
How many months you'll repay over. A longer term means paying interest for longer.
CALCULATOR QUESTIONS
Commercial vehicle loan interest rate calculator questions
How much interest is on van finance?
Enter your figures above. For example, £27,000 at 9% over 48 months costs £5,251.01.
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.
Is the interest tax deductible?
For business use it's generally allowable. Check with your accountant.
Does a bigger deposit help?
Yes. Borrowing less reduces the interest.