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Working Capital Loan Interest Calculator

Work out working capital loan interest instantly with clear inputs, formula shown and shareable results.

About Working Capital Loan Interest Calculator

A working capital facility charges interest only on drawings but often a commitment fee on the unused portion. Low utilisation therefore raises the effective rate on the money actually used, which is why limits should be sized to real need.

Formula

Facility cost

Cost = drawn × rate + (limit - drawn) × commitment fee

Worked example

With the default values below, Working Capital Loan Interest Calculator returns Annual Cost Of The Facility of $797,500.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Sanctioned Limitminimum 0
10,000,000
Average Utilisationaccepts 0–100 %
65 %
Annual Interest Rateaccepts 0–100 %
12 %
Commitment Fee On Unused Limitaccepts 0–3 %
0.5 %

Results

Annual Cost Of The Facility
$797,500.00
Interest On Drawn Amount
$780,000.00
Commitment Fee On Unused Limit
$17,500.00
Effective Rate On Amount Drawn
12.269%

Step by step

  1. 1Values used
  2. 2Facility cost
  3. 3Annual Cost Of The Facility= 797,500.00
  4. 4Interest On Drawn Amount= 780,000.00
  5. 5Commitment Fee On Unused Limit= 17,500.00
  6. 6Effective Rate On Amount Drawn= 12.269

Assumptions and limits

  • The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation or tax into account.
  • Figures are rounded for display to 3 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • Figures are estimates. Lenders apply their own rounding, fees and eligibility rules, and rates change. This is not financial advice — confirm the numbers with your lender.
  • This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Figures are estimates. Lenders apply their own rounding, fees and eligibility rules, and rates change. This is not financial advice — confirm the numbers with your lender.

Frequently Asked Questions

Why do banks charge for money not used?

Because they must hold capital and liquidity against the committed limit whether you draw it or not.

How is utilisation measured?

Usually as the average daily outstanding over the period, not the peak drawing.

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