Calculators › Premium & Pricing

Premium Finance Calculator

Calculate down payment, monthly installment, finance charge and payment schedule for an insurance premium finance agreement.

How the premium finance calculator works

Premium finance lets an insured pay a large commercial premium over time. The finance company pays the carrier up front and collects a down payment plus monthly installments with interest.

Formula

Amount financed = (Premium + Taxes/fees) × (1 − Down %) + Setup fee. Installment = standard amortized payment at APR ÷ 12 over n months.

How to use it

1. Enter total premium and financed taxes and fees.
2. Enter the down payment percentage, APR and number of installments.
3. Add any setup fee and review the schedule.

Worked example

$24,600 financed at 25% down, 9.5% APR over 9 months: $6,150 down and nine payments of about $2,130.

Frequently asked questions

What happens if the insured misses a payment?

The finance company can cancel the policy under its power of attorney and collect the unearned premium from the carrier.

Why is the down payment so large?

It keeps the unearned premium above the remaining loan balance, protecting the lender if the policy cancels.

Related calculators

• Pay in Full vs Installments Calculator — Compare paying an insurance premium in full against an installment plan and see the plan’s true APR.
• Pro-Rata Cancellation Calculator — Calculate pro-rata return premium and earned premium when a policy cancels mid-term.
• Surplus Lines Tax Calculator — Calculate surplus lines premium tax, stamping fee and total cost to the insured for non-admitted (E&S) policies.