Calculator
Term-Out Loan Calculator
Convert revolving debt into scheduled term debt
When a business line of credit stops revolving and becomes permanent debt, lenders may term out the balance. This calculator estimates the new payment, annual debt service, balloon risk, and DSCR impact.
- ✓Turns a line of credit balance into a term-loan payment
- ✓Supports amortization longer than maturity with a balloon balance
- ✓Compares current LOC payment impact against proposed term debt
- ✓Shows DSCR before and after the term-out
$500,000
9.00%
7 yr
5 yr
$300,000
$120,000
$8,000
Term-Out Payment
$8,045
Annual Debt Service
$96,534
Balloon at Maturity
$176,088
Remaining balance due
DSCR After Term-Out
1.39x
Current: 1.39x
A term-out usually lowers pressure on a revolving line by converting the balance to scheduled principal and interest payments. The tradeoff is fixed debt service and, if the maturity is shorter than the amortization, a balloon refinance risk.
Frequently Asked Questions
What does it mean to term out a line of credit?
A term-out converts a revolving balance into a term loan with scheduled payments, often because the line is no longer being used for short-term working capital.
Can a term-out loan have a balloon?
Yes. A lender may use a longer amortization for payment sizing but require the remaining balance to mature sooner.
How does a term-out affect DSCR?
It replaces the current line payment with fixed annual debt service. DSCR improves or worsens depending on the old payment, new rate, term, and amortization.