Enter the equipment price, what you are putting down, the rate you have been quoted and the term, and this calculator returns the monthly payment, the total interest and the full cost of the loan. It uses standard amortisation — the same maths a lender uses to build a payment schedule — so the number it gives you is the number you should see on a term sheet with no fees, balloon or residual attached.
How an equipment loan payment is calculated
Equipment loans are almost always fully amortising: every payment is the same, and each one covers the interest accrued that month with the remainder reducing the principal. The formula is M = P × r(1+r)n / ((1+r)n − 1), where P is the amount financed, r is the annual rate divided by twelve, and n is the number of monthly payments.
Two things follow from that. Early payments are mostly interest, so paying off a five-year loan in year two saves less than people expect. And lengthening the term lowers the monthly payment while raising the total cost — on a $67,500 balance at 9.5%, going from 36 months to 60 drops the payment by roughly a third and adds more than $6,000 in interest. Run both in the calculator above before you accept the longer term.
What actually moves your rate
- The asset itself. Lenders price against what the equipment is worth if they have to take it back. A titled vehicle with an auction market prices better than a custom-built machine with no resale.
- Age and hours. New equipment gets the longest terms and the lowest rates. Used equipment tightens both — used equipment financing and leasing covers the age caps and inspection requirements lenders apply.
- Time in business and revenue. Under two years in business narrows the lender pool considerably, and it is usually rate rather than approval that moves first.
- Credit profile. Below roughly 650 you are into specialist territory — no credit check equipment financing sets out what you trade away, and how fast you can get funded without perfect credit covers realistic timelines.
- Down payment. Ten to twenty percent is typical. Zero down is available on strong files and is priced accordingly.
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Typical terms by asset type
Term length tracks how long the asset holds value, which is why a crane and a laptop do not finance the same way. Our asset-specific guides cover the underwriting rules for each:
- Semi truck financing — the 10-year and 700,000-mile lender ceiling, and what changes between new and used.
- Dump truck, box truck and cargo van financing — vocational and light commercial vehicles.
- Excavator, skid steer and crane financing — where hour meters and deposits drive the decision.
- Heavy equipment financing for packaging several machines into one facility, and equipment financing for the general case.
The tax side the calculator does not show
A loan makes you the owner from day one, which means you can depreciate the asset. For tax years beginning in 2025 the IRS caps the Section 179 deduction at $2,500,000, reduced dollar for dollar once the cost of Section 179 property placed in service during the year exceeds $4,000,000, with a separate $31,300 limit on sport utility vehicles. Those amounts are indexed and change most years — confirm the current figures in IRS Publication 946 and check with your accountant how they apply to your purchase.
Leasing changes that picture entirely, because payments on a true operating lease are generally deducted as an operating expense instead. Equipment financing vs leasing works through the total cost of each over a full term.
What this calculator leaves out
- Fees. Documentation, UCC filing and origination fees are common and are not in the payment above. A $500 doc fee on a $67,500 loan is roughly a quarter-point of extra cost.
- Balloons and residuals. Some equipment deals end with a lump sum. If yours does, the monthly payment will be lower than this calculator shows and the total will not be.
- Insurance and maintenance. Lenders require coverage on financed equipment; budget it separately.
- Factor rates. Some fast-funding offers quote a factor rate rather than an APR. They are not interchangeable, and converting one to the other is the only way to compare offers honestly.
Frequently asked questions
What interest rate should I expect on an equipment loan?
It varies far too widely for a single number to be useful. Strong credit, an established business and a liquid asset can price in the high single digits; a startup buying specialised equipment can be well into the twenties. Use a quoted rate in the calculator rather than an assumed one wherever you can.
Does a longer term always cost more?
In total interest, yes — assuming the rate is the same. Lenders often price longer terms slightly higher as well, so the gap is usually wider than the calculator suggests if you hold the rate constant.
Can I finance used equipment?
Yes, though age and hour caps apply and terms are shorter. See used equipment financing and leasing for what lenders check.
How much down payment do I need?
Ten to twenty percent is the common range. Zero-down structures exist for established businesses with strong credit, usually at a higher rate.
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Quick application, and approvals in less than 48 hours.