Business Loan Refinance Calculator
Compare the business loan you have against a new one you are considering. Enter both sets of terms to see the payment difference, the total cost of each loan, and how many months of savings it takes to recover your closing costs.
Cumulative cost year by year
Each row shows the total dollars paid on each loan through the end of that year, including any fees paid at closing. Once a loan is fully repaid, its cumulative total stops growing while the other may keep climbing.
| Year | Current loan paid | New loan paid | Difference |
|---|
How the business loan refinance calculator works
Refinancing replaces one debt with another. To compare them fairly, the calculator builds a payment for each loan using the same amortization formula, then lines the two up side by side:
where P is the balance being amortized, r is the monthly rate (annual rate ÷ 12), and n is the number of monthly payments remaining. When the rate is zero, the payment is simply P ÷ n.
For the current loan, P is your remaining balance, r comes from your current rate, and n is the months left in the term. For the new loan, P is that same balance plus any fees you choose to roll in, r comes from the new rate, and n is the new term. Total remaining cost of the current loan is its payment multiplied by the payments left. Total cost of the new loan is its payment multiplied by its payments, plus any fees you pay out of pocket rather than financing. The lifetime difference is one total minus the other.
Reading the break-even point
Break-even answers a narrow question: how long do the lower payments take to give back the cash you spent at closing? The arithmetic is simple.
Two situations have no break-even month, and the calculator says so in plain language rather than printing a meaningless number. If you roll the fees into the balance, nothing leaves your bank account at closing, so there is nothing to recover — though you are now paying interest on those fees for the life of the loan. And if the new payment is equal to or higher than the old one, payment savings never accumulate, so no number of months recovers the cost. A higher payment is not automatically a worse outcome — a shorter term raises the payment while cutting total interest — but it does mean break-even is the wrong lens for that comparison.
Term length changes the total, independent of rate
This is the part of a refinance comparison that is easiest to misread. If you have six years left and you refinance into a new ten-year loan, the monthly payment almost certainly drops — but you are also making forty-eight more payments than you would have. Interest accrues for four extra years on money you would otherwise have repaid. The lifetime total can rise even though the rate fell.
The reverse holds too. Moving from a ten-year loan into a five-year loan usually raises the payment and cuts the lifetime total sharply, and most of that reduction comes from the shorter schedule rather than from the rate. So when the two totals differ, the difference is a blend of two separate effects, and the calculator does not try to separate them for you. If you want to see the rate effect on its own, set the new term equal to your remaining term and read the comparison again. Whatever difference remains is attributable to the rate and the fees. Then change the term and watch what moves.
Costs that live outside the rate
A refinance quote rarely reduces to two numbers. The items below can change the comparison enough to reverse it, and most are worth confirming in writing before you rely on any estimate.
- Prepayment penalties — some term loans charge a percentage of the balance or a fixed number of months of interest to pay off early. Adding that amount to the fees field folds it into the comparison.
- Origination and packaging fees — often quoted as a percentage of the new loan. Convert to dollars before entering.
- Third-party costs — appraisal, title, filing, and legal fees on secured loans, which are real cash regardless of who the lender is.
- Variable rates — if either loan floats, both payments shown here are snapshots at today's index, not commitments.
- Collateral and covenants — a new agreement can carry reporting requirements or liens the old one did not, and those do not appear in any payment.
What the numbers do and do not tell you
The comparison here is a cash arithmetic exercise, not a verdict. Monthly savings, total cost, and break-even measure different things and can point in different directions at the same time — lower payments alongside a higher lifetime total is an ordinary result, not an error. Which of those matters more depends on facts this page cannot see: how tight your monthly cash flow is, how long you expect to hold the debt, what else the freed-up cash could earn, and how you weigh certainty against flexibility. Use the totals as inputs to that judgment, and check the schedule of any real offer against the estimate before deciding anything.
Frequently asked questions
How does a business loan refinance calculator work?
It builds two amortization payments and compares them. The current payment comes from your remaining balance, your current rate, and the years left on the loan. The new payment comes from the balance being refinanced (plus any fees you roll in), the new rate, and the new term. The difference between the two payments is the monthly change, and the difference between each loan's total payments is the lifetime change.
What is the break-even point on a refinance?
The break-even point is the number of months of lower payments needed to recover what you pay at closing. It is calculated as out-of-pocket cost divided by monthly savings. If you roll fees into the new loan, there is no out-of-pocket cost to recover, but the fees are still being repaid with interest inside the new balance. If the new payment is not lower, there is no break-even point on payment savings.
Why does a lower rate sometimes show a higher total cost?
Total cost depends on the term as well as the rate. Stretching a balance over more years means more months of interest accruing, which can raise the lifetime total even at a lower rate. To isolate the effect of the rate, set the new term equal to the years remaining on the current loan and set closing costs to zero, then compare again. With the terms matched but fees left in, the remaining difference reflects the rate and the fees together.
Should I roll closing costs into the new loan?
That is a cash flow question, and the calculator shows both sides rather than answering it. Rolling fees in preserves cash today but increases the financed balance, so you pay interest on the fees for the life of the loan. Paying fees at closing keeps the balance lower but uses cash now and creates a break-even period. Toggle the setting to see both totals.
What costs does this refinance calculator leave out?
It does not model prepayment penalties on the existing loan, variable rates that move after closing, interest already accrued but unpaid, or differences in compounding and day-count conventions between lenders. Add any prepayment penalty to the fees field to include it in the comparison.
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This calculator is for educational and informational purposes only and does not constitute financial, legal, tax, or lending advice. Estimates are based on the values you enter and standard financial formulas. Confirm all figures with a qualified professional before making decisions.