Line of Credit Calculator

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Understanding line of credit payments

A line of credit is one of the most accessible, flexible forms of business financing. Line of credit funds can be used for just about anything—from buying equipment to paying invoices. Use it when you need it; leave it when you don’t.

The best part? You only pay interest on the capital you use. So your line of credit payment is comprised of the amount borrowed, interest rates, and term.

Line of credit interest rates

You only pay interest rates on the funds borrowed for a line of credit. If you have a line of credit for $50,000, and you use $20,000, you only pay interest on the $20,000. If you borrow $1,000, you only owe interest on the $1,000.

Interest rates for a line of credit have a wide range, typically falling between 10% and 60%. Your interest rate will be determined by your credit score, what the lender offers, and how much capital you use. Keep in mind that you only pay interest on the funds you use, not the full line of credit amount. This helps you keep your costs lower.

Line of credit term

The term length for a line of credit is typically 1–2 years.

Keep an eye out for fees

Lendio offers free applications for a line of credit (and every other form of financing) with our network of 75+ lenders. Many lenders charge application fees. If you’re shopping around, ask about fees before you apply. No one wants to get all the way through a loan application only to be surprised by a fee at the end.

You’ll also want to consider potential origination fees. Some lenders charge origination fees, an up front fee to cover the cost of a loan. Ask your funding manager if the lender charges origination fees so you can anticipate the full cost of the loan before you apply.

How you can reduce line of credit costs

Good borrower behavior goes a long way with lines of credit. Make payments on time—it’s that advice you hear over and over again because it’s true. If you tend to lean towards the Dory side of memory, set yourself up for success by setting up automatic payments or setting calendar reminders for due dates. That way, you can keep your costs low without having to sing “just keep paying” on repeat.

Still on the fence?

We know. Financial applications can be a drag. That’s why we carved ours down to a single 15-minute application that gives you access to a curated network of 75+ lenders. That’s an average of 12 seconds for each lender. You won’t find a better value for your time.

If you don’t find the right fit with any of our lenders, you can move on with your life. No fees. No obligations. Just a little bit more financial wisdom.

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