The total cost of a business loan: the questions that reveal it in dollars

“What’s the repayment?” is usually the first thing owners ask about a loan, and it’s the least useful number on its own. Two loans with the same repayment can cost wildly different amounts. Two loans with different repayments can end up costing the same. The number that settles it is the total cost, in dollars.

Here’s how to get it, and how to use it.

What does “total cost” actually include?

Everything you pay above the amount you borrow. On a business loan, that can include:

Cost	What to ask
Interest	How is it calculated, and is it paid as you go or added to the loan?
Establishment or application fee	How much, and is it paid upfront or added to the loan?
Ongoing or monthly fees	How much, and for how long?
Line fee (revolving facilities)	Is there a charge for having the limit available, even if unused?
Legal and documentation costs	Whose lawyers, and who pays?
Valuation fee	Is a valuation needed, and what does it cost?
Discharge fee	Is there a fee to release security at the end?
Early repayment or break costs	What does it cost to finish early, and what would it save?
Late payment fees and default interest	What happens if a repayment is missed?

Ask for each of these as a dollar figure for your loan, not as a general description.

Why is the repayment alone misleading?

Because it hides the term and the fees. Here’s an illustrative comparison of two offers for the same amount, described without figures so it stays about structure, not pricing:

	Offer A	Offer B
Term	12 months	36 months
Each repayment	Higher	Much lower
Upfront fees	Higher	Lower
Interest paid over the life of the loan	Paid over one year	Paid over three years
Early repayment	Allowed, saves remaining interest	Allowed, but a break fee applies
Total cost in dollars	Often lower overall	Often higher overall

Illustrative example only — not an offer or a guide to pricing.

Offer B feels easier every month. Offer A may well cost less overall, even with its higher upfront fee. Neither is automatically right: if cash flow can’t carry Offer A’s repayments, it’s the wrong loan. The point is to see both totals, in dollars, before you choose.

Want a specialist to walk you through the total for your situation? Request your call-back here.

How should I compare offers fairly?

Put them on the same basis:

1. Same amount. Compare the same loan amount, or work out cost per dollar actually received after upfront fees.
2. Same period. If you expect to repay a short-term loan in six months, compare the six-month cost, not the full term.
3. All fees in. Include every fee from the table above.
4. Same exit. If one offer has a balloon or residual, include it and ask what refinancing it would cost.
5. Realistic use. For a line of credit, estimate how much you’d actually draw and for how long.

Write it all in one table. Our guide on what to write down after a finance call has a layout you can reuse.

Why doesn’t Loan Hotline publish rates?

Because they’d mislead more people than they helped. Business lending is priced on the whole picture — the security, the trading history, the purpose, the term and how quickly it’s needed. A figure on a website would be wrong for most readers and would set expectations that fall apart once the real situation is assessed.

The honest approach is the one on this page: understand the situation, then talk about the total cost of the options that genuinely fit.

What about the cost of not borrowing?

It belongs in the comparison. Doing nothing can cost money too:

• ATO balances. General interest charge and shortfall interest charge incurred on or after 1 July 2025 are no longer tax deductible, so an unpaid ATO balance costs more in after-tax terms than it used to. See our ATO debt call prep.
• Missed opportunities. A bulk stock discount, a contract that needed equipment, a business that needed a fit-out to grow.
• Penalties and late fees on bills that fall due before the money arrives.

Sometimes, of course, the cheapest option is not to borrow at all — a payment plan, a supplier arrangement or chasing what you’re owed. A good specialist will say so.

What should I ask on the call?

• What is the total cost in dollars for my loan, over the period I expect to use it?
• Can you break that total down by fee?
• What would it be if I repaid early — say, halfway through?
• Is anything in the cost variable, or could it change during the term?
• Will I get all of this in writing before I sign?

More good questions in what to ask any business lender on the first call and exit and early repayment.

What if I’ve already signed and the costs feel wrong?

Start by comparing your contract with your notes from the call, and raise any difference with the lender in writing. If you can’t resolve it, use the lender’s internal complaints process. ASIC’s guidance on disputes about commercial loans explains the further options.

Ready to see the real numbers?

We’d rather talk dollars for your situation than advertise a figure that doesn’t fit it. Asking won’t trigger a credit check, your enquiry isn’t passed around a lender network, and the specialist who calls has read your details first.

Please give an accurate amount, purpose, state and any property you own — that’s what lets us talk about real costs on the first call. Choose a window and request the call-back.