SOFR interest calculator for commercial loans
Estimate simple SOFR-linked commercial loan interest using principal, benchmark rate, credit spread, floor, accrual days and day-count basis.
SOFR-linked interest estimate
- Effective benchmark
- 5.300%
- All-in annual rate
- 7.550%
- Day-count fraction
- 30/360
Use the result as an educational estimate or reasonableness check. A production calculation must follow the agreement’s exact SOFR form, observation convention, dates and rounding.
Calculation boundaries
Assumptions behind this estimate
Transparent assumptions make it easier to identify where a contractual or production calculation may differ.
- The principal remains constant for the entered accrual period.
- The benchmark input is one annualized rate; this page does not construct daily compounded SOFR.
- The effective base rate is the greater of the entered SOFR rate and contractual floor.
- Interest equals principal × all-in annual rate × days ÷ selected year basis.
Common questions
Calculator FAQ
How is SOFR loan interest calculated?OpenClose
The governing agreement determines the method. A simple educational estimate applies the benchmark plus contractual spread to principal for the eligible accrual days and day-count basis. Daily simple, compounded-in-arrears and Term SOFR structures require their specified conventions.
Does this calculator compound daily SOFR observations?OpenClose
No. It accepts one annualized benchmark input. Use approved observations or an official index and the agreement’s methodology for a production compounded calculation.
Why does the day-count basis matter?OpenClose
The denominator converts elapsed days into a fraction of a year. Using 360 instead of 365 produces a different result even when principal, rate and days are unchanged.