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Illustrative only. Assumes a fixed rate and equal monthly repayments (annuity). Your actual offer depends on Credicorp’s assessment of your company.
The basic mechanics
Interest is the rate applied to a balance over a period of time. On most business loans it is charged monthly on the amount outstanding, so the total depends on how much you owe, for how long, at what rate. Change any one and the cost changes.
Reducing-balance interest
On a reducing-balance loan, interest is charged only on what you still owe, which falls with each repayment. Early payments are interest-heavy, later ones clear principal. This is standard amortisation and the fairer method. See the guide.
Flat-rate interest
A flat rate charges on the original amount for the whole term, even as you repay. It looks cheaper but costs far more — its APR is often nearly double the headline. Always convert before comparing. See flat rate vs APR.
How term and rate combine
A higher rate raises each month's interest; a longer term adds more months of it. Together they set the total cost. Understanding the interaction lets you pull the levers to cut cost — see reducing loan cost.
See the interest in your loan
Use the calculator to see exactly how much of your repayments is interest.
Credicorp lends to your company, not to you personally, and takes no personal guarantee. See indicative terms on business loans, or apply online in minutes.
Frequently asked questions
How is interest calculated on a business loan?
As the rate applied to a balance over time. On most loans it is charged monthly on the amount still outstanding, so the total depends on how much you owe, for how long, and at what rate.
What is the difference between flat and reducing-balance interest?
Reducing-balance charges only on what you still owe, so the cost falls as you repay. Flat-rate charges on the original amount throughout, which understates the cost — its APR is often nearly double.
How does the loan term affect interest?
A longer term adds more months of interest, raising the total even at the same rate. A shorter term costs less overall but means higher monthly payments — a trade-off to balance against affordability.
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