Equipment Financing Calculator
How to Use This Calculator
- 1
Enter Equipment Cost ($) and Down Payment ($)
The difference is the amount financed. Enter the purchase price before fees or taxes unless you want to include them in the financed amount.
- 2
Set Annual Interest Rate (%) and Loan Term (years)
Use the lender's annual interest rate and repayment term. The calculator converts the annual rate to a monthly rate and generates an amortization schedule.
- 3
Review payment totals and the schedule
Check monthly payment, total interest, total repayment, and the yearly principal, interest, and remaining balance. The schedule assumes a fixed rate and equal monthly payments.
Example Calculation
A business purchases $75,000 of equipment, pays $15,000 upfront, and finances the remaining $60,000 at 7.5% for five years.
Equipment Cost ($)
75,000
Down Payment ($)
15,000
Annual Interest Rate (%)
7.5
Loan Term (years)
5
Results
Monthly Payment
$1,202.28
Total Interest
$12,136.56
Total Repayment
$72,136.56
Financed Amount
$60,000 (80%)
Interest Rate (Monthly)
0.625%
Interest-to-Loan Ratio
20.2%
Tips
A $25,000 down payment lowers the monthly payment to about $1,001.90
Change Down Payment ($) from $15,000 to $25,000 while leaving the 7.5% rate and five-year term unchanged. The amount financed falls to $50,000, reducing total interest to about $10,113.80.
The yearly schedule shows interest falling as principal is repaid
Review the Year, Principal Paid, Interest Paid, and Remaining Balance rows to see how the payment is allocated over time. Compare the first and final years before deciding whether an early payoff is worthwhile.
What this calculator estimates
Equipment financing is borrowing used to buy machinery, vehicles, or other business equipment, with the equipment or other assets sometimes serving as collateral. This calculator estimates fixed monthly payments, total scheduled interest, repayment, and a yearly amortization summary; it does not include fees, taxes, or variable-rate changes.
How the payment and amortization work
Principal = Equipment cost − Down payment
Monthly rate = Annual interest rate ÷ 12
Number of payments = Loan term in years × 12
Monthly payment = Principal × r × (1 + r)^n ÷ ((1 + r)^n − 1)
Total repayment = Monthly payment × n
Total interest = Total repayment − Principal
r is the monthly rate as a decimal, and n is the total number of monthly payments. For the example, principal is $75,000 − $15,000 = $60,000, the monthly rate is 0.075 ÷ 12 = 0.00625, and n is 5 × 12 = 60. The fixed-payment formula gives approximately $1,202.28 per month; 60 payments total $72,136.56, so modeled interest is $72,136.56 − $60,000 = $12,136.56.
The yearly schedule groups payments into principal paid, interest paid, total paid, and remaining balance. It helps show when the balance falls and how much of the repayment cost comes from interest.
How the down payment changes the loan
A larger down payment reduces the principal, monthly payment, and total interest when the rate and term stay fixed. It also ties up more cash at the time of purchase.
| Down payment | Amount financed | Monthly payment | Total interest |
|---|---|---|---|
| $15,000 | $60,000 | $1,202.28 | $12,136.56 |
| $25,000 | $50,000 | $1,001.90 | $10,113.80 |
The larger down payment reduces modeled interest by $2,022.76, but uses an additional $10,000 immediately. Compare the saving with your need for operating cash, and check the loan agreement for fees, collateral requirements, and prepayment terms. The SBA's 7(a) loan program information describes one source of small-business financing; actual equipment-loan terms depend on the lender and product.
When to use a different calculator
- Compare loan repayment with a lease → Buy vs. Lease Equipment Calculator
- Estimate lease payments → Equipment Leasing Calculator
- Calculate equipment value decline rather than financing cost → Equipment Depreciation Calculator
- Model a loan with extra principal payments → Amortization Schedule with Extra Payments Calculator
- Estimate equipment returns against the investment cost → Return on Investment (ROI) Calculator for Equipment
What this estimate leaves out
A lender's quote can differ because of origination fees, payment timing, variable rates, balloon payments, or financed taxes and insurance. The calculator assumes the entire financed balance follows one fixed-rate amortization schedule, so compare its estimate with the lender's payment disclosure before committing.
Frequently Asked Questions
What is included in total repayment?
Total Repayment is the sum of the scheduled loan payments and includes principal plus modeled interest. It excludes the down payment, origination fees, taxes, insurance, and any other lender charges.
How does an equipment loan amortization schedule work?
Each monthly payment first covers that month's interest, calculated on the outstanding balance, and the remainder reduces principal. As the balance declines, the interest portion generally falls and the principal portion rises; this schedule assumes no extra payments or rate changes.
Is the interest rate the same as APR?
No, the interest rate is the borrowing rate used in the payment formula, while APR can include certain fees and expresses a broader annual borrowing cost. Compare written loan disclosures and fee terms as well as the rate; the CFPB explains the difference between interest rate and APR.
Should I use a larger down payment or keep the cash?
A larger down payment reduces the loan balance and interest, while keeping cash preserves funds for working capital and unexpected costs. Compare the interest saved with the return and liquidity value of the cash, and check whether the lender charges a prepayment penalty before planning extra payments.
Does the calculator include fees or a changing interest rate?
No, it models a fixed annual interest rate and regular monthly payments without fees or rate resets. Add financed fees to the equipment cost only if they are actually included in the loan, and use a variable-rate loan model if the lender can change the rate.