Commercial Insurance Premium Financing Calculator

Project how a premium finance arrangement spreads a commercial insurance bill across installments. Provide the annual premium, required down payment, and quoted finance charge APR to reveal the financed balance, finance charges, monthly payment, and total cost once interest and the upfront check are combined. Adjust the installment term to mirror lender terms in seconds.

Total insurance premium you plan to finance for the policy term before fees.
Percentage of the premium paid upfront to activate coverage.
Simple-interest annual percentage rate charged by the premium finance company.
Optional — defaults to 10 monthly installments when blank.

Premium finance agreements vary by lender. Review your contract for exact APR calculations, prepayment clauses, and cancellation terms before booking journal entries.

Examples

  • Example 1 — $180,000.00 premium, 25% down, 9.50% APR, term blank (defaults to 10 months) ⇒ Down payment: $45,000.00 | Amount financed: $135,000.00 | Finance charges over 10.00 months: $10,687.50 | Monthly payment: $14,568.75 | Total cost of coverage: $190,687.50
  • Example 2 — $72,000.00 premium, 20% down, 12.00% APR, 9-month term ⇒ Down payment: $14,400.00 | Amount financed: $57,600.00 | Finance charges over 9.00 months: $5,184.00 | Monthly payment: $6,976.00 | Total cost of coverage: $76,080.00

FAQ

Can I include broker or policy fees in the financed amount?

Yes. Add approved fees to the premium input so the financed balance matches the amount on your premium finance agreement.

How do I compare lenders with different installment terms?

Run the calculator for each term and APR. Convert the total cost or monthly payment into an effective APR to see which lender is cheaper once all installments are considered.

What happens if the carrier issues a mid-term endorsement?

Increase or decrease the premium input and re-run the calculation to preview how the down payment, financed balance, and monthly installments will adjust after the endorsement posts.

Does this include late fees or non-sufficient funds charges?

No. Add any flat service charges separately — this tool focuses on the financed premium, interest, and scheduled installments.

Additional Information

  • Premium finance loans usually carry simple interest, so finance charges scale linearly with the installment term.
  • Most premium finance contracts require 20–35% down and run for 9–10 months; plug in your lender's exact term to tighten estimates.
  • If you prepay the balance early, request the unearned interest calculation from the lender to confirm your payoff quote.
  • Late or missed installments can trigger policy cancellation — include service charges or NSF fees outside this core calculation if applicable.

Related calculators