Business Funding

Business Line of Credit Calculator: How to Estimate Payments

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Chris Scarfo, Co-founder, Lending Gurus
Ten years in business banking before co-founding Lending Gurus. · Updated Nov 3, 2026

A business line of credit calculator answers one question: if I draw this much, what will I pay? The tricky part is that a line doesn’t work like a loan. You pay on what you draw, the balance moves every time you borrow or repay, and lenders structure repayment in different ways. If you’re new to how lines work, start with our complete guide to the business line of credit. This post shows you how to run the numbers yourself, step by step, so you can size a draw before you take it. When you’re ready to see lines that fit, head to our business line of credit page.

What goes into a line of credit payment

Every line of credit estimate comes down to five inputs. Get these from the offer or the agreement, not from an ad:

Amount drawn. Not your limit. A $50,000 line with $10,000 drawn charges interest on $10,000.
How the price is quoted. Some lines quote an annual interest rate. Others charge a fee per draw or a set charge per week. You need to know which one you have.
How interest is figured. Many lenders calculate interest on your daily balance. Ask whether they use a 365 or 360 day year.
Repayment structure. Interest only payments, a minimum monthly payment, or each draw paid back in fixed weekly or monthly payments over a set term.
Fees. Draw fees, maintenance or annual fees, and setup fees all add to what you actually pay.

The CFPB describes a line of credit as an account with a credit limit where you pay interest based on your outstanding balance and possibly a fee each time you use it. That’s the core idea behind every calculator: the balance drives the cost.

How to calculate line of credit interest

Here’s the basic formula most daily balance lines follow:

Interest = amount drawn x (annual rate / 365) x days the money is out

Illustrative example, not a quote from any lender: you draw $20,000 on a line with a 12% annual rate and keep it out for 30 days.

Daily rate: 12% / 365 = about 0.0329% a day
Daily interest: $20,000 x 0.000329 = about $6.58
30 days of interest: $6.58 x 30 = about $197

If you’d repaid $5,000 halfway through the month, the second half would only accrue interest on $15,000. That’s why paying down a line early saves real money, and why a line can cost less than a lump sum loan when you only need part of the cash for part of the time.

How to estimate your payment by repayment type

Interest is only half the story. Your actual payment depends on how the lender wants the money back.

Interest only payments

Some lines let you pay just the interest during the draw period. Using the example above, that’s about $197 for the month. Your balance doesn’t shrink, so the same interest keeps showing up until you pay down principal. It feels light, but it’s the slowest way out.

Each draw repaid over a fixed term

Many online lines treat each draw like a small loan with its own schedule, often weekly. Illustrative example: a $20,000 draw repaid over 26 weekly payments.

Principal each week: $20,000 / 26 = about $769
Interest in week one at a 12% annual rate: $20,000 x 12% / 52 = about $46
First week’s payment: about $815, getting smaller as the balance drops if interest is charged on the remaining balance

Some lenders price a draw with a flat fee spread across the payments instead of interest on a shrinking balance. Same draw, different math, so always ask how the charge is figured.

Minimum monthly payment

Some bank lines work more like a credit card. You owe a minimum each month, often interest plus a slice of principal, and you can pay more any time. Ask the lender exactly how that minimum is set, since it can move as your balance changes.

Don’t forget fees

Illustrative example: a 1% draw fee on a $20,000 draw adds $200 the day you take the money. On a short draw, a fee like that can cost more than the interest. Add every fee to your estimate before you compare offers.

Use our business loan calculator for the repayment math

Lending Gurus doesn’t have a separate line of credit calculator, but the business loan calculator handles the hardest part. Once you know a draw’s amount, rate, repayment term and any upfront fee, enter them as if the draw were a small loan:

Loan amount: the amount you plan to draw.
Interest rate: the annual rate in your offer.
Term: the number of months you’ll take to repay that draw.
Upfront fee: any draw fee, as a percent of the draw.
Monthly revenue: optional, but it shows the payment next to what your deposits can carry.

That gives you an estimated payment, total interest and an effective APR you can compare across offers. For more on how payment schedules work, read how to estimate monthly business loan payments and simple interest vs amortization. If an offer is quoted as a factor rate instead, the MCA cost calculator shows what it costs in plain dollars.

Watch how your payment moves as you draw and repay

A line is revolving, so your payment isn’t fixed for life. Here’s how it plays out over a season, again as an illustrative example on a $50,000 line:

Month 1: you draw $10,000 for inventory. Interest runs on $10,000.
Month 2: you draw another $10,000 for payroll during a slow stretch. Interest now runs on $20,000, and your payment goes up.
Month 3: a big customer pays and you repay $15,000. Interest drops to $5,000 worth, and $15,000 of your limit opens back up.
Month 4: you pay off the last $5,000. No balance, no interest, and the full line is ready for the next gap.

That cycle is the whole point of a line. See what a business line of credit is good for for the needs it handles best, and revolving credit vs an installment loan if you’re deciding between the two.

What a calculator can’t tell you

Your estimate is only as good as the inputs. A few things to keep in mind:

Business offers don’t always show an APR. Under federal rules, credit extended primarily for a business purpose is exempt from Regulation Z, the rule behind standard consumer APR disclosures (12 CFR 1026.3). So you may need to work out the full cost yourself. APR vs interest rate explains why the headline number isn’t the whole story.
The lender sets your limit and pricing. That depends on your revenue, time in business and credit. Our business line of credit requirements guide covers what lenders look at, and the SBA notes that banks typically look for good personal credit and about two years in business with healthy revenue.
Terms can change. Some lenders review lines on a schedule and can raise, lower or close them. Read the agreement for review and renewal terms.

Turn the estimate into a decision

Once you have a payment, compare it to your monthly deposits, not your best month. If the payment still works in a slow month, the draw is probably sized right. If it only works when everything goes well, draw less or pick a longer repayment term. Weighing a line against other tools? Compare working capital loans vs a line of credit and a merchant cash advance vs a line of credit.

Guru’s Take

Before you draw, run the payment against your slowest month, not your best one, and size the draw so it still fits when deposits dip. We also add every fee to the interest before comparing offers, because on a short draw a fee can cost as much as the rate. When you’re ready to apply, Plexe is our preferred line of credit partner, and you can start your Plexe application here. We match you with partners, and the partners decide your limit, pricing and terms.

How Lending Gurus helps

Guru is your lending sidekick. Guru doesn’t lend or make funding decisions. Guru matches you with partners whose lines fit your business, and partners make every decision on limits, pricing and terms. Partners Guru may match you with include Fora Financial and 1West.

If your business is in an eligible state, Plexe is Guru’s preferred line of credit partner. Plexe isn’t available in California, Hawaii, Nevada, North Dakota, South Dakota, Tennessee or Puerto Rico. It’s built for businesses with 24 or more months in business, $15,000 or more a month in bank inflows and a balance of $5,000 or more on most days, run by a U.S. citizen or permanent resident with a FICO score of 685 or higher and a credit file of 5 or more years with no bankruptcy or charge offs. Plexe’s conditional offer shows draw amounts, fees and weekly repayments before you commit, which makes the math in this post easy to check. For a wider look, see the best business lines of credit.

FAQ

How do I calculate interest on a business line of credit?

Multiply the amount you’ve drawn by the annual rate, divide by 365, and multiply by the number of days the money is out. Ask the lender whether it uses a 365 or 360 day year and how often it charges interest.

Do I pay interest on my full credit limit?

Usually not. Interest is normally charged on the amount you’ve drawn. Some lines do charge maintenance or annual fees just to keep the line open, so check the agreement.

Can I use a loan calculator for a line of credit?

Yes, for each draw. Enter the draw amount, the rate, the months you’ll take to repay and any draw fee. The result is an estimate for that draw, not the whole line.

Why did my line of credit payment go up?

Most likely your balance went up from a new draw. If your line has a variable rate, a rate change can move the payment too.

Find lines that fit with Guru

This post is general information, not financial, legal or tax advice. All examples are illustrative and are not offers or quotes. Lenders set their own requirements and terms, and partners make all funding decisions. Talk with your CPA or attorney about your situation. Read our editorial policy.

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