If you’re looking to borrow money but want to see what payments would look like before you apply, our loan calculator is just the tool you need.

The TGUC Contractor Loan Calculator is designed to help contractors estimate project costs and understand potential loan repayments for construction or renovation projects. Enter the loan amount, the interest rate, and the repayment term to see your expected monthly payment. Please keep in mind that this is only an estimate and doesn’t include additional fees.

Key Loan Terms To Know

Annual Percentage Rate (APR): The APR reflects the total cost of borrowing, including the interest rate and other fees, expressed as a yearly percentage. It’s a more comprehensive measure of the loan’s cost than
the interest rate alone.

Interest Rate: The percentage charged by the lender for borrowing the money. This is a key factor
determining the overall cost of the loan. Interest rates are influenced by factors like the US Federal Reserve
rates and their credit score. Current rates can range from 5% to 20%.

Repayment Term: The length of time you have to repay the loan, typically expressed in years (e.g., 3, 5, 10, or 15 years).

Principal: The original amount of money borrowed.

Closing Costs: These are fees associated with finalizing the loan, including appraisal fees, title insurance, and lender fees. These costs are usually paid upfront.

Down Payment: Some construction loans may require a down payment—a percentage of the project cost paid upfront by your client.

Key Considerations to Think About Before Your Project

Clarify What You’re Seeking: Are you seeking the lowest monthly payment of the best offer which allows you to pay off the debt interest-free?

Draw Schedule: Clarify with your contractor about how a draw schedule works, with funds disbursed in phases as the project progresses. This provides financial control and reduces risk for both your client and the lender.

Interest-Only Payments During Construction: During construction, payments may be interest-only, with principal repayments starting after project completion and loan conversion to a traditional mortgage.

Pre-Approval Advantages: Strongly recommend pre-approval to establish a firm budget and improve negotiating power with suppliers and subcontractors. This improves your position throughout the project. Pre-qualification does not impact their credit report with the bureau.

Comparison Shopping: Compare loan offers from different lenders. This helps you secure the best possible terms and interest rates.