This calculator from Quillhaven Financial in Huntington, West Virginia estimates the payment and interest on a drawn credit line balance, using the rate in an offer you hold. The output is your own figures run through a formula, never an offer. Notes below cover monthly interest, interest-only periods, conversion and what an estimate leaves out.
Commercial Line of Credit Interest Rates: The Rate You Enter Comes From Your Offer
Line rates are usually set as an index plus a margin, so they can change during the life of the line. The rate to enter is the one in an offer you actually hold. Typical rates cannot be given here; they depend on the partner, the business and the market at the time.
The calculator treats the rate as fixed for the months you enter. If your offer has a variable rate, try a second calculation at a higher rate to see how a change would affect the payment.
Line of Credit Interest Calculator Monthly View for a Cabell County, WV Draw
A simple way to estimate one month's interest on a draw is the balance times the annual rate, divided by 12. Illustration only, invented figures: a $30,000 draw at an invented annual rate of 10.5% costs about $262.50 in interest for one month, and about $1,575.00 over 6 months if the full balance stays drawn (our arithmetic).
Lenders often compute interest daily on the actual balance, so a draw repaid in pieces costs less than the simple estimate. The calculator's payment figure assumes the balance is repaid in equal monthly payments over the months you enter.
Interest-Only Line of Credit Loan Calculator: What Changes at Conversion
Many lines charge interest only on the drawn balance during the draw period. At maturity, or if the line is not renewed, the balance may convert to a term payment that includes principal. That changes the monthly payment sharply.
Illustration only, invented figures: the same $30,000 balance, converted to a 24-month repayment at 10.5%, would carry a payment of about $1,391 a month, against about $262.50 of interest only (our arithmetic). Enter 24 months in the calculator to see the converted payment.
Limits of an Interest Estimate: Fees, Renewals and Approval
The calculator does not include origination, annual or unused-line fees, draw fees, late charges, or changes in a variable rate. It does not know whether a partner will approve a line, renew it or change its limit. Its results are illustrative arithmetic only.
For the terms written into a line, see the credit line page; for the request steps, how a request moves.
An Invented Draw, Worked by Hand Beside the Calculator
- Take the drawn balance and the annual rate from your offer.
- Divide the rate by 100 and by 12 to get the monthly rate.
- Multiply the balance by the monthly rate for one month of interest.
- Multiply by the number of months the balance stays drawn for a rough total.
- Compare with the calculator's figure, which assumes the balance is repaid in equal payments.
If the hand figure and the calculator differ, the difference is the principal being repaid along the way.
By Quillhaven Financial · Updated
