What is the break-even point for refinancing?

The break-even point is the number of months for monthly payment savings to cover refinance costs. If refinancing saves $600/month and costs $3,600, break-even is 6 months. After break-even, every month of savings is pure gain. Under 12 months is generally favorable.

Does refinancing always lower my interest rate?

Not always. Rates depend on your credit profile, revenue, time in business, and market conditions. If your business has improved since the original loan, you may qualify for a better rate. Even with a similar rate, adjusting the term can lower payments or reduce total interest.

What fees are involved in refinancing?

Common refinancing costs include an origination fee (1-3%), closing costs ($500-$5,000+), and any prepayment penalty on the existing loan. Some lenders waive origination fees for refinance borrowers. Always calculate net savings after all costs.

Should I extend the term when refinancing?

Extending the term lowers monthly payments but may increase total interest even with a lower rate. If cash flow is tight, the lower payment can be worthwhile. If you can afford higher payments, keeping a shorter term maximizes total savings.

Refinance Savings Calculator

Find out if refinancing your business loan saves you money. Enter your current loan details and a new offer to see monthly savings, total interest saved, net savings after fees, and a break-even timeline.

100% FreeNo SignupInstant Results

Compare your current loan against a new offer to see if refinancing saves you money. Factor in fees and penalties to get the real picture.

A lower rate does not always mean savings once you account for closing costs and prepayment penalties.

1
Your Current Loan

Enter the details of the loan you are considering refinancing.

Remaining Balance

The outstanding principal balance on your current loan.

Current Interest Rate: 18%

3%35%

Months Remaining: 24

1 mo120 mo

Auto-calculate monthly payment

2
New Refinance Offer

Enter the terms of the loan you are considering switching to.

New Interest Rate: 10%

3%35%

New Loan Term

Origination Fee: 2%($3,000)

0%5%

Closing Costs

New loan closing and processing fees.

Prepayment Penalty

Penalty for paying off your current loan early.

Worth Considering

You could save $2,484 by refinancing, but factor in the time to recoup fees.

$2,484

net savings

Monthly Savings

$2,649

/month

Interest Saved

$5,484

over loan life

Refinance Costs

$3,000

fees + penalties

Break-Even

2 mo

to recoup fees

Current Loan

$7,489/mo

18% for 24 months

Total remaining: $179,727

New Loan

$4,840/mo

10% for 36 months

Total cost: $177,243

Balance Payoff Timeline

Mo 1

Mo 4

Mo 7

Mo 10

Mo 13

Mo 16

Mo 19

Mo 22

Mo 25

Mo 28

Mo 31

Mo 34

Mo 36

Current loan

New loan

Break-Even Timeline

Month 0Break-even: Month 2Month 36

Monthly savings of $2,649 cover the $3,000 in refinance costs after 2 months. The remaining 34 months are pure savings.

▶Full Comparison Details

Detail	Current Loan	New Loan
Interest Rate	18%	10%
Remaining Term	24 months	36 months
Monthly Payment	$7,489	$4,840
Total Interest	$29,727	$24,243
Refinance Fees	N/A	$3,000
Total Remaining Cost	$179,727	$177,243
Net Savings		$2,484

Refinancing looks promising. Compare a few offers to maximize your savings.

Get matched with refinance offers from multiple lenders. No impact to your credit score.

Check Refinance Options See True Cost of Loan

When Does Refinancing a Business Loan Make Sense?

Refinancing replaces your existing loan with a new one, ideally at a lower rate, better terms, or both. The goal is to reduce your total cost of borrowing or free up cash flow. But refinancing is not free. Origination fees, closing costs, and prepayment penalties on the old loan can eat into your savings. The question is whether the savings exceed the costs. This calculator answers that question with concrete numbers.

Understanding the Break-Even Point

The break-even point is the number of months it takes for your monthly payment savings to cover the upfront cost of refinancing. If your monthly payment drops by $500 and refinancing costs $3,000, the break-even is 6 months. After that, every month of savings is pure gain. If you plan to pay off the loan before the break-even point, refinancing costs you more than it saves. Use our prepayment penalty calculator to estimate the cost of exiting your current loan early.

Rate Drop vs Term Extension

A lower rate is the most common reason to refinance. If you originally borrowed at 18% and can refinance at 10%, the interest savings are significant. But watch the term. Extending from 24 months remaining to 60 months drops the monthly payment dramatically, but you may pay more total interest over the longer term. This calculator shows both the monthly savings and the total cost so you can weigh the tradeoff. For a deeper look at monthly payments under different terms, try the loan payment calculator.

Getting the Best Refinance Offer

Just like your original loan, the best refinance deal comes from comparing multiple offers. Rates, fees, and terms vary widely between lenders. Term loans from traditional lenders often have the lowest rates for borrowers with strong credit and revenue history. Lines of credit can replace a fixed loan with flexible access to capital. Talk to a funding specialist to see what refinance options are available for your business, with no impact to your credit score.

How It Works

Enter Current Loan Details

Input your remaining balance, interest rate, months left, and current monthly payment.

Add the New Offer

Enter the new rate, term, origination fee, closing costs, and any prepayment penalty on your existing loan.

See Your Savings

Get monthly savings, total interest saved, net savings after fees, and a break-even timeline.

What You Get

Monthly Payment Comparison

Current payment versus new payment, so you can see how much cash flow improves each month.

Total Interest Savings

How much less you pay in interest over the life of the new loan compared to the old one.

Net Savings After Fees

Interest savings minus all refinance costs, including origination fees, closing costs, and prepayment penalties.

Break-Even Timeline

The exact number of months it takes for monthly savings to cover the cost of refinancing.

Balance Payoff Chart

Visual comparison of how quickly each loan pays down the balance over time.

Side-by-Side Comparison

A detailed table showing every metric for both loans, so you can compare at a glance.