Equipment Finance Calculator

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Amortisation Schedule

Year Remaining Balance Monthly Repayment Interest Paid Ending Balance
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Check Your Equipment Finance Repayments


Equipment Finance Calculator Table of Contents




How to use the Equipment Finance calculator


To use the equipment finance calculator, you’ll need to enter some details about your loan to estimate your scheduled repayments. These are explained below:

  • Loan Amount - The amount of money you will be taking out under an equipment finance agreement.
  • Interest Rate - This is the fixed interest rate the lender will apply to your equipment finance loan.
  • Balloon Payment - A balloon payment is often represented as a percentage of the total loan amount. It will result in a reduced regular repayment amount at the cost of a higher, final payment. Balloon payments are commonly used when purchasing a vehicle through equipment finance, such as a chattel mortgage.
  • Establishment Fees - Any upfront fees charged by the lender when creating the equipment finance loan agreement. This will allow you to determine the full total amount of your equipment finance loan.
  • Loan Term - The length of your equipment finance loan as dictated by your loan agreement. The loan term is important as it will allow you to accurately calculate your monthly and weekly payments based on the Annual Percentage Rate (APR).

Once you have filled in your equipment finance loan details, simply click ‘See My Repayments’ to view an estimated repayment amount. You can then select Monthly, Fortnightly, or Weekly repayments to see what your repayment amount will be at various frequencies.


Equipment Finance Repayment and Interest Formula


The equipment finance calculator uses what is called an amortisation calculation. This gives you an understanding of how much interest you will pay for each month and year of your equipment finance term.


Equipment finance often uses a fixed rate of interest over a fixed term, however you will need to understand how your repayments are used toward repaying the interest amount and principal amount to determine how much interest you will pay each time.


When you first begin repaying your equipment finance loan, a larger percentage of your repayment amount will be put toward repaying your interest on the loan. This is because, at the start of your loan agreement, your interest will be calculated on the full loan amount. As you make repayments and the principal amount decreases, so will the portion of your repayments put toward paying the interest.


As a mathematical formula, calculating amortisation can seem complex and difficult. However, once you understand how interest is calculated on your principal loan amount over time, you should be able to perform the calculations yourself.


The simple formula for calculating Loan Repayments is: Loan Amount / Discount Factor


However, the calculations become a little more complex when finding the discount factor, which is calculated by dividing the interest rate of your loan by the number of payments per year (12 for monthly, 26 for fortnightly, or 52 for weekly) to first obtain the Periodic Interest Rate.


The formula is expressed as: (((1 + i) ^n) - 1) / (i (1 + i)^n)


  • n = the number of repayments
  • i = the annual interest rate

To show how this complex formula can be easily understood, we’ve presented a simple example below.


Equipment Finance Calculator example


In the example below, we’ll use a $50,000 loan at a 12% interest rate, repaid monthly over 7 years without a balloon payment attached to the loan:


  • n = 84 (12 repayments per year for 7 years)
  • i = 0.01 (where the interest rate (12%) is divided by the number of annual payments (12) to provide a decimal representation of the interest rate)
  • Using the discount factor formula above, we can calculate the discount factor: ((((1+0.01)^84) - 1) / (0.01(1+0.01)^84)) = 56.6484
  • The discount factor is then calculated as 56.6484
  • We then take our loan amount ($50,000) and apply the Loan Repayment Formula, dividing the loan amount by the discount factor. This will provide your monthly repayments: 50,000 / 56.6484 = 882.637
  • We then round this figure out to a double-digit decimal amount. Your monthly repayments on this loan will be $882.64

If you want to quickly calculate your repayments without creating your own spreadsheet with the above calculations, you can use our free equipment finance calculator.


Equipment Finance Calculator FAQs

You will qualify for equipment finance with the majority of Australian lenders if you operate a business which has been trading for at least 12 months, have an Australian Business Number and are registered for GST. You can still qualify for equipment finance if you are self-employed, a sole trader, or your business has been operating for less than 12 months, however you may be required to provide extensive documentation to prove your ability to repay the loan.

Equipment finance interest rates start as low as 4.49% for a commercial hire purchase or finance lease, while an unsecured business loan will have interest rates that start at 9.90%. The best equipment finance interest rates will be offered to secure, stable businesses applying for a secured form of equipment finance.

A balloon payment is a percentage of your loan amount which is not factored into your monthly repayments. If you apply for an equipment finance loan that includes a balloon payment, you will have two choices at the end of the loan term: you can either pay the balloon amount in full, or discuss with your lender about financing the residual amount into another loan.

You won’t need to put down a deposit on equipment finance if you own a home. In fact, you won’t need to provide a deposit at all if you are comfortable with the approval process taking a little longer. If you wish to fast-track your application through a streamlined equipment finance application and are renting a home, you will need to provide a 20% deposit on the assets you wish to finance.


More information about Equipment Finance


If you’d like to learn more about equipment finance in Australia, you can choose from any of the specialised guides below.