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What will my commercial loan cost?

See the monthly payment on a commercial loan, the balloon when it falls due, and the APR once points and fees are counted.

Your numbers

An example rate, not today’s rate. Use the rate your lender quotes.
The same as the amortization period for a loan with no balloon.
Monthly payment
$4,339.12

A $500,000.00 commercial loan at 8.5% amortized over 20 years costs $4,339.12 a month and leaves a $440,635.92 balloon after 5 years; the APR is 8.89%.

Cash you get $492,500.00Cost of the loan $208,482.89
70% cash you get30% cost of the loan
Balloon at the end of the term
$440,635.92
Number of payments
60
APR
8.89%
Points and fees
$7,500.00
Cash you get
$492,500.00
Total interest
$200,982.89
Total paid
$700,982.89
Cost of the loan
$208,482.89
Balloon due
September 2031
Months
60

Answer for the example date Wednesday, September 30, 2026. It changes to today's date when the page loads.

Monthly payment: $4,339.12. A $500,000.00 commercial loan at 8.5% amortized over 20 years costs $4,339.12 a month and leaves a $440,635.92 balloon after 5 years; the APR is 8.89%.

How much of what you repay is cost?

How much is still owed when the balloon comes due?

What does every payment look like?

The results are estimates for information only. They are not financial, tax, or legal advice. Check the numbers with your lender or a qualified professional before you decide. Terms of use

How to calculate

Computes the monthly payment, the balloon, the total cost, and the APR of a commercial or business loan amortized over a longer period than its term, with points and fees.

Example with the default inputs (Loan amount $500,000.00, Interest rate 8.5%, Amortization period (years) 20, Loan term (years) 5, Points (origination fee) 1%, Other fees $2,500.00, Loan start date September 30, 2026) on the example date Wednesday, September 30, 2026: A $500,000.00 commercial loan at 8.5% amortized over 20 years costs $4,339.12 a month and leaves a $440,635.92 balloon after 5 years; the APR is 8.89%.

Method: payment = L × r ÷ (1 − (1 + r)^−A), with r = rate ÷ 1200 and A the amortization months; balloon = the balance after the n payments of the term; APR = 12 × j, where the payments and the balloon discounted at j add up to L minus the points and fees.

  • The rate is fixed; interest is the balance × the yearly rate ÷ 12 each month.
  • Payments are made at the end of each month, and the balloon is paid with the last one.
  • Points and fees are paid up front out of the loan, so you receive the loan amount minus them.
  • The APR follows the actuarial method of Regulation Z with a month as the unit period.
  • Values are not rounded to the cent between months; only the display is rounded.

Machine-readable copies: Markdown, JSON.

Worked examples

Each example is checked against the calculator on every build.

  1. Loan amount $500,000.00, Interest rate 8.5%, Amortization period (years) 20, Loan term (years) 5, Points (origination fee) 1%, Other fees $2,500.00 gives Monthly payment $4,339.12, Balloon at the end of the term $440,635.92, Total interest $200,982.89, Other fees $7,500.00, APR 8.892274%, Cost of the loan $208,482.89.Source: Regulation Z, 12 CFR 1026 appendix J, annual percentage rate computations. https://www.consumerfinance.gov/rules-policy/regulations/1026/j/
  2. Loan amount $250,000.00, Interest rate 7%, Amortization period (years) 10, Loan term (years) 10, Points (origination fee) 0%, Other fees $0.00 gives Monthly payment $2,902.71, Balloon at the end of the term $0.00, APR 7%, Total interest $98,325.44.Source: Regulation Z, 12 CFR 1026 appendix J, annual percentage rate computations. https://www.consumerfinance.gov/rules-policy/regulations/1026/j/
  3. Loan amount $1,000,000.00, Interest rate 0%, Amortization period (years) 25, Loan term (years) 10, Points (origination fee) 2%, Other fees $0.00 gives Monthly payment $3,333.33, Balloon at the end of the term $600,000.00, Total interest $0.00, Other fees $20,000.00, APR 0.252403%.Source: Regulation Z, 12 CFR 1026 appendix J, annual percentage rate computations. https://www.consumerfinance.gov/rules-policy/regulations/1026/j/

How it works

Write L for the loan amount, r for the monthly rate (the yearly rate in percent ÷ 1200), A for the amortization period in months (years × 12), and n for the term in months (years × 12). The term must not be longer than the amortization period.

  1. Payment: payment = L × r ÷ (1 − (1 + r)^−A). At 0% it is L ÷ A.
  2. Balloon: the balance after the n payments of the term: L × (1 + r)^n − payment × ((1 + r)^n − 1) ÷ r (at 0%, L − payment × n). It is due with the last payment. When the term equals the amortization period the balloon is 0.
  3. Schedule: each month, interest = balance × r and the rest of the payment lowers the balance; the last month also pays the balloon, so the principal adds up exactly to L.
  4. Totals: total interest = n × payment + balloon − L; total paid = L + interest.
  5. Points and fees: fees = L × points ÷ 100 + other fees. The cash you get is L − fees; it must be more than 0. The cost of the loan is the total paid minus the cash: the interest plus the fees.
  6. APR: find the monthly rate j at which the payments and the balloon, discounted at j, add up to the cash: cash = payment × (1 − (1 + j)^−n) ÷ j + balloon × (1 + j)^−n. The APR is 12 × j (the actuarial method of Regulation Z, appendix J, with a month as the unit period). With no points or fees, the APR equals the rate.
  7. Balloon due: with a start date, the first payment is one month after it and the last payment and balloon are due n months after it.

Assumptions

  • The rate is fixed; interest is charged monthly at the yearly rate ÷ 12.
  • Payments are made at the end of each month.
  • Points and fees are paid up front out of the loan.
  • Prepayment penalties, reserves, and fees paid over time are not included.
  • Values are not rounded to the cent between months; only the display is rounded.
  • The default rate and fees are examples, not live figures.

Worked examples by hand

$500,000 at 8.5%, amortized over 20 years, due in 5, with 1 point and $2,500 of fees. r = 0.085 ÷ 12 = 0.0070833 and A = 240, so (1 + r)^−240 = 0.183782 and the payment is 500,000 × 0.0070833 ÷ (1 − 0.183782) = $4,339.12. After n = 60 payments, (1 + r)^60 = 1.527301, so the balloon is 500,000 × 1.527301 − 4,339.116 × 0.527301 ÷ 0.0070833 = $440,635.92. Interest is 60 × 4,339.116 + 440,635.92 − 500,000 = $200,982.89. The fees are 5,000 + 2,500 = $7,500, so you get $492,500 and the loan costs $208,482.89. The monthly rate at which 60 payments of $4,339.12 and the balloon are worth $492,500 is 0.741023%, so the APR is 8.89%.

$250,000 at 7% over 10 years, no balloon, no fees. (1 + r)^−120 = 0.497596, so the payment is 250,000 × 0.0058333 ÷ (1 − 0.497596) = $2,902.71. The balloon is $0, the interest is 120 × 2,902.712 − 250,000 = $98,325.44, and with no fees the APR is the rate, 7%.

$1,000,000 at 0%, amortized over 25 years, due in 10, with 2 points. The payment is 1,000,000 ÷ 300 = $3,333.33; 120 payments repay $400,000, so the balloon is $600,000. There is no interest; the fee is $20,000. The monthly rate at which 120 payments of $3,333.33 and $600,000 in month 120 are worth $980,000 is 0.021034%, so the APR is 0.25%.

Other questions people ask

How is a commercial loan payment calculated?

The payment is figured over the amortization period: payment = L × r ÷ (1 − (1 + r)^−A), where L is the loan, r the yearly rate ÷ 12, and A the amortization period in months. A $500,000 loan at 8.5% amortized over 20 years costs $4,339.12 a month.

What is a balloon payment on a commercial loan?

Many commercial loans are amortized over 15 to 25 years but fall due after 3 to 10 years. The balance left when the term ends is due at once as a balloon. The $500,000 loan above still owes $440,635.92 after 5 years.

How do points and fees change the APR?

Points and fees come out of the money you receive, but you still repay the whole loan. The APR is the rate at which your payments and the balloon repay only the cash you get. With 1 point and $2,500 of fees, the 8.5% loan above has an APR of 8.89%.

Do lenders have to disclose the APR on a commercial loan?

Regulation Z (Truth in Lending) covers consumer credit, not credit for business purposes, so a lender may quote only a rate and fees. This page works out the APR the way Regulation Z does for consumer loans, so you can compare offers on one scale.

How does a balloon affect the APR?

Fees count for more when the loan is repaid sooner. A balloon after 5 years spreads the same fees over fewer years than a fully amortizing 20-year loan, so the APR is higher.

Is the example rate a current commercial loan rate?

No. The page shows no live rates. The default rate and fees are examples; enter the terms a lender quotes you.