Farm equipment loan payment calculator
Most equipment calculators assume monthly payments. Farm loans usually aren't monthly. This one handles annual, semiannual and quarterly payments too, and shows the whole schedule so you can see what's left at any point.
Calculate the payment
Same loan, four payment schedules
Financing $225,000 for 6 years at 6.9%:
| Schedule | Each payment | Per year | Total interest |
|---|---|---|---|
| Annual | $47,058 | $47,058 | $57,351 |
| Semiannual | $23,215 | $46,431 | $53,585 |
| Monthly | $3,825 | $45,903 | $50,417 |
Annual payments cost about $7,000 more over six years than monthly. For an operation that gets paid once a year, that can be money well spent. A monthly payment that falls due in June, when the account is lowest, can end up costing more than that in overdraft or operating-line interest. Pick the schedule that matches when your money comes in.
Tracking several of these at once? The free farm bill due-date tracker keeps them in date order.
The formula
A level-payment loan uses the standard amortization formula, with the rate and number of payments matched to how often you pay:
payment = P × r ÷ (1 − (1 + r)−n)
P = amount financed, r = annual rate ÷ payments per year, n = years × payments per year
Each payment first covers the interest built up since the last one, and the rest pays down principal. Early payments are mostly interest, which is why the balance seems to barely move in the first couple of years.
Before you sign
- Ask for the payoff terms. Some ag equipment loans charge a prepayment penalty or apply extra payments to the next payment instead of principal.
- Match the term to the machine. Paying on a combine for longer than you plan to keep it usually means trading it in while you still owe money on it.
- Put the payment in your cost per acre. A $47,000 annual payment spread over 900 acres adds about $52 an acre. The cost per acre calculator has a line for it.
Questions people ask
Why do farm equipment loans use annual payments?
Because farm income comes in lumps. An annual or semiannual payment can be timed to land after harvest or after cattle sell, when the cash is there. Most ag lenders and manufacturer finance companies offer annual, semiannual, quarterly and monthly options.
Is an annual payment more expensive than monthly?
Slightly, over the life of the loan. With one payment a year, the balance stays higher for longer, so more interest builds up. In the example on this page, annual payments cost about $7,000 more in interest than monthly. The trade-off is that you only have to come up with the money when you actually have it.
How do I compare 0% financing with a cash rebate?
Run the loan at 0% and note the total of payments. Then take the cash price minus the rebate and run it at your bank's rate. Whichever total is lower is the better deal. A big enough rebate often beats 0%.
What's the difference between price, down payment and trade?
The amount financed is the price minus your cash down payment and your trade-in allowance. Sales tax, documentation fees and any extended warranty you roll into the loan get financed too, so add them to the price.
Does the first payment come one period after purchase?
In this calculator, yes. That's standard amortization. Some dealer programs defer the first payment to a set date. A short delay barely changes the payment, but a long one adds interest, which is rolled into the balance or charged with the first payment.
Related tools
Not financial advice. These calculators give estimates from the numbers you enter. Your lender's terms, fees, day-count method and tax situation can change the result. Check with your lender or advisor before you act. Full disclaimer.