Calculator
All-in cost of bank debt and private debt
The calculator compares two debt offers over the expected holding period: interest, arrangement fee or OID, prepayment penalty and annualised all-in cost.
Bank offer
4.87%
annualised all-in cost
Debt fund offer
9.28%
annualised all-in cost
| Item | Bank offer | Debt fund offer |
|---|---|---|
| Interest rate | 4.50% | 8.50% |
| Interest over the period | €6.75m | €17.00m |
| Arrangement fee or OID | €0.50m | €1.25m |
| Prepayment penalty | €0.00m | €0.00m |
| Total cost | €7.25m | €18.25m |
| Average annual cost | €1.81m | €4.56m |
| Annualised all-in cost | 4.87% | 9.28% |
The initial values are sample inputs to replace with the terms of your offers. This calculation gives an order of magnitude and commits no lender.
Method
The components of the cost
The annualised all-in cost is the rate that equates the net amount received at signing with the flows paid until repayment. Interest is calculated once a year on the outstanding principal.
Interest rate
Interest rate = higher of the base rate and the floor + margin
Arrangement fee or OID
Net amount received = debt amount × (1 − fee or discount)
Prepayment penalty
Penalty = principal repaid before maturity × penalty rate of the year
Example
Worked example
A debt of €50m is repaid after 4 years. The bank offer, amortising over 6 years at 4.50%, costs €7.25m over the period. Its annualised all-in cost stands at 4.87%. The fund offer, bullet over 7 years at 8.50%, costs €18.25m. Its annualised all-in cost stands at 9.28%. The terms of this example are sample inputs.
Benchmarks
Cost of new financing in France
| Financing | August 2026 | August 2025 |
|---|---|---|
| Bank loans above €1m | 3.54% | 3.21% |
| Bank loans of €1m or less | 3.84% | 3.65% |
| Debt securities issuance | 3.87% | 3.26% |
| All financing | 3.73% | 3.35% |
Contact