Monthly interest and the final balance

Interest-only business loan calculator

See the monthly cost of servicing interest and the capital you would still owe at the end. Compare an interest-only business loan with repaying the same borrowing over the same term.

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Free to use · No credit search · GBP estimates

Monthly interest payments service the borrowing without reducing capital.

Your illustrative estimate

Monthly repayment

£750.00

Monthly interest payment. Capital is repaid separately at the end.

Loan amount: £100,000.00
Total interest: £18,000.00
Upfront fees: £0.00
Total paid, including fees: £118,000.00
Balance due at the end: £100,000.00

Plan how you will repay £100,000.00 at the end. It is included in the total paid above.

No application or credit search. No personal details needed. Estimates assume on-time payments and an unchanged rate; lender rounding, daily interest and contractual fees can differ.

Compare repayment structures

Same amount and rate. Entered fees stay the same.

Illustrative comparison of repayment costs
Scenario	Monthly payment	Interest	Total incl. fees	End balance
Interest-only	£750.00	£18,000.00	£118,000.00	£100,000.00
Capital & interest	£4,568.47	£9,643.38	£109,643.38	£0.00

View the full monthly repayment schedule

Upfront fees are separate from the monthly rows. Any final capital or accrued-interest balance is payable in addition to the last monthly payment.

Monthly opening balance, payment, interest, capital repaid and closing balance in GBP
Month	Opening balance	Payment	Interest	Capital repaid	Closing balance
1	£100,000.00	£750.00	£750.00	£0.00	£100,000.00
2	£100,000.00	£750.00	£750.00	£0.00	£100,000.00
3	£100,000.00	£750.00	£750.00	£0.00	£100,000.00
4	£100,000.00	£750.00	£750.00	£0.00	£100,000.00
5	£100,000.00	£750.00	£750.00	£0.00	£100,000.00
6	£100,000.00	£750.00	£750.00	£0.00	£100,000.00
7	£100,000.00	£750.00	£750.00	£0.00	£100,000.00
8	£100,000.00	£750.00	£750.00	£0.00	£100,000.00
9	£100,000.00	£750.00	£750.00	£0.00	£100,000.00
10	£100,000.00	£750.00	£750.00	£0.00	£100,000.00
11	£100,000.00	£750.00	£750.00	£0.00	£100,000.00
12	£100,000.00	£750.00	£750.00	£0.00	£100,000.00
13	£100,000.00	£750.00	£750.00	£0.00	£100,000.00
14	£100,000.00	£750.00	£750.00	£0.00	£100,000.00
15	£100,000.00	£750.00	£750.00	£0.00	£100,000.00
16	£100,000.00	£750.00	£750.00	£0.00	£100,000.00
17	£100,000.00	£750.00	£750.00	£0.00	£100,000.00
18	£100,000.00	£750.00	£750.00	£0.00	£100,000.00
19	£100,000.00	£750.00	£750.00	£0.00	£100,000.00
20	£100,000.00	£750.00	£750.00	£0.00	£100,000.00
21	£100,000.00	£750.00	£750.00	£0.00	£100,000.00
22	£100,000.00	£750.00	£750.00	£0.00	£100,000.00
23	£100,000.00	£750.00	£750.00	£0.00	£100,000.00
24	£100,000.00	£750.00	£750.00	£0.00	£100,000.00

How are interest-only loan payments calculated?

For the model used here, multiply the loan amount by the nominal annual interest rate and divide by 12. That is the monthly interest payment when the balance and rate remain constant. The original loan amount is due at the end of the agreed term.

For example, £100,000 at an assumed nominal annual rate of 9% produces monthly interest of £750. Over 24 months that is £18,000 in interest. With £2,000 in upfront fees, the total paid including the £100,000 capital repayment is £120,000. This illustrates the formula and is not a lender quotation.

Why the final capital balance matters

Regular interest payments do not build equity by reducing this loan balance. A planned sale, cash accumulation or refinance needs to provide the capital repayment separately. Refinancing is subject to a future lender agreeing to lend, and sale proceeds can be affected by market conditions and transaction costs.

The calculator places the capital due at the end beside the monthly payment so that it remains visible. It assumes every monthly interest payment is made on time. Unpaid interest, fees added to the borrowing or variable rates can increase what is owed.

Compare the whole repayment structure

Use the comparison table to see a capital-and-interest loan at the same amount, rate and term. The regular payment is higher because it reduces the debt. Its total interest can be lower because later interest is charged on a smaller balance.

Interest-only business finance may be considered for a specific timing requirement, but a smaller monthly payment alone does not establish suitability. Match the end-of-term liability to a realistic capital repayment plan and allow for delays.

Confirm whether interest is paid monthly, deferred or added to the balance.
Check whether the stated rate is nominal annual or monthly.
Include cash fees and charges when comparing the full cost.
Ask what happens if the expected repayment source is delayed.

Business partners discussing a financial plan at a whiteboard — An interest-only agreement needs a separate plan to repay the capital.

Business owner inspecting a commercial workshop while holding a tablet — Consider the final capital liability as well as the monthly interest cost.

Common questions

Before you compare finance

Does the loan balance fall with interest-only payments?

No. Under this model it remains the original principal throughout. Extra capital repayments are not included on this page; use the amortisation calculator for a repayment loan with overpayments.

Can I use this for an interest-only commercial mortgage?

Yes, for constant-rate monthly interest on an entered balance. The commercial mortgage calculator also includes a deposit and purchase-price LTV calculation.

What if interest is rolled up instead of paid each month?

Use the bridging calculator and select the appropriate deferred or compounded structure. Adding interest to a balance can change the interest calculation and the final repayment substantially.

Sources and calculation assumptions

Reviewed 11 October 2026. Independent educational tool; calculations are estimates, not a finance offer or affordability assessment. Annual-rate tools use a nominal rate divided by 12. The bridging tool uses the entered monthly rate. All fees are paid upfront. No payment holidays, taxes, insurance or default charges are included.

Your next step

Turn the estimate into a funding discussion

Review the repayment budget, then tell us about your business and funding requirement through the existing enquiry form.

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