Dental practice loan calculator

How this calculator works

Each scenario is a fixed-rate loan with monthly payments in arrears. For a principal P, a nominal annual rate a, an amortization period of A whole months and a maturity of T whole months where 1 ≤ T ≤ A, the monthly rate is r = a / 1200 and the scheduled payment is:

payment = P / A                        when r = 0
payment = P*r / (1 - (1+r)^(-A))        otherwise

Each month is then walked one at a time:

interest_this_month  = opening_balance * r
principal_this_month = payment - interest_this_month
closing_balance      = opening_balance - principal_this_month

Balances are carried at full precision from one month to the next and rounded only for display, so a long schedule does not drift. The final amortizing payment is limited to the remaining principal plus that month's interest. Principal repaid plus any balloon must reconcile to the original principal within a cent; if it cannot, the tool reports a failure instead of quietly forcing a balance to zero.

Amortization is not maturity

The amortization period sets the size of the payment. The maturity is when the loan is actually due. When maturity is earlier than the amortization period, the balance left after the scheduled payment in month T is the additional balloon due at maturity. It is shown as a separate requirement, never folded into the monthly payment, and it appears in a maturity year's row separately from that year's scheduled payments, including in printed and copied output.

What total modeled outlay includes

Scheduled payments through maturity, plus any additional balloon, plus upfront fees paid separately. Total modeled interest is the sum of the monthly interest installments through maturity, nothing more.

Assumptions this tool makes

• The rate is fixed for the whole term. Variable-rate resets are not modeled.
• Payments are equal, monthly and in arrears, with no interest-only period and no irregular payments.
• Interest accrues on a simple monthly basis. Daily accrual conventions and APR are not modeled.
• Upfront fees are paid separately rather than added to the principal or netted from proceeds.
• There are no prepayments, no deferrals and no capitalized interest.

Limits worth knowing

• This is an arithmetic model of a payment schedule. It is not a loan offer, a rate quote, a credit decision or an assessment of whether a practice can afford a payment.
• Nothing here is adjusted for income taxes. Interest deductibility and depreciation are outside the model.
• Scenarios with different principals or different maturities are not equivalent, because they do not deliver the same proceeds or leave you in the same position at maturity. The comparison shows them side by side and does not name a winner.

Questions to ask a lender about these terms

• Is the rate fixed or variable? If variable, what is the index, the margin, the reset frequency and the cap?
• What is the amortization period, and what is the actual maturity date? Is there a balloon, and what happens at maturity?
• Is there an interest-only period? For how long, and what does the payment become afterwards?
• What fees apply (origination, packaging, SBA guaranty, appraisal, environmental, legal, filing) and which are paid at closing versus financed?
• Is there a prepayment penalty or a yield-maintenance charge? On what schedule does it decline?
• Who must guarantee the loan personally, and for how long does the guarantee survive?
• What collateral is taken, including practice assets, accounts, equipment, real property and any life insurance assignment?
• Are deposit, treasury or merchant-services relationships required as a condition?
• What financial covenants apply, how are they measured, and what happens on a breach?
• What conditions remain before funding, diligence, appraisals, landlord consents, licensing, insurance, environmental review?

A payment difference between two structures is often smaller than the difference made by a prepayment penalty, a personal guarantee that never burns off, a covenant measured quarterly, or a balloon that arrives before a practice is ready to refinance. Terms this tool does not model can matter more than the number it shows.