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The simple method
For a fixed-term loan with equal monthly payments: multiply the monthly payment amount by the number of payments, then add any fees not already included in the payment (such as an up-front arrangement fee charged separately). The result is the total repayable.
Example: £2,000 per month over 24 months = £48,000 in payments. Plus a £1,500 arrangement fee paid on drawdown = £49,500 total repayable on a £40,000 facility. The total cost of the loan is £9,500 — the difference between what you received and what you repaid. These are illustrative figures, not a quote.
Working with factor-rate products
For a product priced on a factor rate rather than an interest rate, the calculation is simpler in one respect: multiply the amount drawn by the factor rate. A £60,000 advance at a factor rate of 1.30 gives a total repayable of £78,000. There is no amortisation schedule to follow — the amount is fixed from the outset, and you owe it regardless of how quickly you repay unless a specific early-settlement discount is offered.
See APR or factor rate — what's the difference? for more on factor-rate structures.
Variable-rate loans
Where the interest rate floats — typically linked to the Bank of England base rate or a reference rate — the total repayable cannot be calculated precisely in advance. Lenders will usually provide an illustration based on the current rate held constant for the full term. This illustration is a planning tool, not a guarantee. If the rate rises, your total repayable increases; if it falls, it decreases.
For a comparison with fixed-rate structures, see Should I pick a fixed or variable rate?
Comparing multiple offers
To compare lenders fairly, request a total repayable figure from each on the same drawdown amount and the same term. Make sure the figures include all mandatory fees. Exclude optional products such as payment protection or account management add-ons unless you intend to take them. A lower monthly payment does not mean lower total cost if the term is longer — always compare the sum over the full life of the facility.
Frequently asked questions
Should I ask for the total repayable before or after tax?
Lenders quote total repayable before tax. The post-tax cost depends on your company's tax position — specifically whether the interest element is deductible and at what rate your company pays corporation tax. See <a href="/answers/business-loan-interest-tax-deductible/">Is business loan interest tax-deductible?</a> for guidance on the deduction.
What if the lender will not provide a total repayable figure?
A reputable commercial lender should be able to provide a clear total repayable illustration for any fixed-term facility. If one cannot, ask for a full amortisation schedule and calculate it yourself. Inability or reluctance to provide this figure is worth treating as a due-diligence concern.
Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.