# Customer Financing Calculator: Quote a Monthly Payment

A customer financing payment is the job price (less any down payment) amortized over the lender's term at its APR. A $12,500 HVAC replacement at 9.99% APR over 60 months is about $265.53 a month. The lender typically charges the contractor a dealer fee, $625 at 5% here, so price the job with that in mind.

## Key takeaways

- Monthly payment = amount financed × r ÷ (1 − (1 + r)^−n), with r the APR ÷ 12 and n the term in months.
- The lender's dealer (merchant) fee comes out of your payout. Promotional 0% plans usually carry the highest fees.
- To net your full quote, divide the financed amount by (1 − dealer fee) before you present the price.
- If you advertise or quote a monthly payment, federal Truth in Lending rules require the full terms alongside it.

> **Estimate, not a credit offer**
>
> Payments here are illustrations using the inputs you enter. The homeowner's actual rate, term and approval come from the lender and depend on their credit. Use your lender's rate sheet for the APR and dealer fee, and its approved disclosures whenever you present a payment to a customer.

## How do you turn a job price into a monthly payment?

Take the amount financed (price minus down payment), apply the lender's APR as a monthly rate, and spread it over the term with the standard loan formula. Homeowners compare a $265 payment with their budget far more readily than a $12,500 total, which is why financing lifts close rates on replacements and remodels.

**Formula**

```
Payment = A × r ÷ (1 − (1 + r)^−n)
```

Where:
- A = amount financed: job price − down payment
- r = APR ÷ 12
- n = term in months

1. **Start with your real price.** Price the job for margin first using the [job pricing calculator](https://www.brix.so/tools/job-pricing-calculator). Financing is a way to pay, not a reason to discount.
2. **Enter the lender's plan.** APR and term from the rate sheet. For same-as-cash promos, enter 0% and the promo length.
3. **Enter the dealer fee.** The percentage the lender deducts from your funding. It's on the same rate sheet, usually higher for lower customer APRs.
4. **Decide how to handle the fee.** The calculator shows what you net and the price that nets your full quote. Many lender agreements and some state laws restrict charging financing customers more than cash customers, so check your lender's rules before grossing up a price.
5. **Present the payment with the terms.** Show APR, term, down payment and total of payments the way the lender's disclosure does.

> **Worked example**
>
> A homeowner's HVAC replacement is quoted at $12,500 with nothing down. The lender's plan is 9.99% APR for 60 months with a 5% dealer fee.
>
> Payment: **$265.53 a month**. Over the term the homeowner pays $15,932, of which $3,432 is interest.
>
> The lender funds you $11,875 after its $625 fee. To net the full $12,500, the job would need to be priced at $13,158, which is $279.50 a month.
>
> On an 18-month 0% promo with a 10% fee, the payment is $694.44 and the fee is $1,250: better for the homeowner, more expensive for you.

## Which financing plan should you offer?

**Common plan types on a $12,500 job**

| Plan | Homeowner's payment | Interest they pay | Dealer fee you pay | You net |
| --- | --- | --- | --- | --- |
| 18 months, 0% promo | $694.44 | $0 | $1,250 | $11,250 |
| 36 months | $403.28 | $2,018 | $625 | $11,875 |
| 60 months | $265.53 | $3,432 | $625 | $11,875 |
| 120 months | $165.12 | $7,314 | $625 | $11,875 |

_Illustrative APRs and dealer fees entered into the calculator; your lender's rate sheet will differ. Long terms produce the lowest payment but the most interest for the homeowner._

Offer two or three options rather than one: a short promo for customers who can pay it off fast, and a long term for the lowest payment. Present the payment next to the energy or repair savings the new system brings, so the homeowner sees the monthly cost against a monthly benefit.

## What are the rules for advertising a monthly payment?

Under Regulation Z (Truth in Lending), stating the amount of a payment, the number of payments or period of repayment, a down payment, or the amount of a finance charge in an advertisement is a "triggering term." If you use one, the ad must also state the down payment, the terms of repayment, and the annual percentage rate (and that it may increase, if it can). "Payments as low as $199 a month" with nothing else doesn't comply. Use the lender's approved language and keep the disclosures on the same page as the payment.

**Regulation Z § 1026.24(d): triggering terms and required disclosures**

| If your ad says… | It must also state… |
| --- | --- |
| A down payment amount or percentage | The amount or percentage of the down payment |
| The number of payments or the repayment period | The terms of repayment over the full term |
| The amount of any payment | The annual percentage rate, using that term |
| The amount of any finance charge | Whether the rate can increase after consummation |

_Source: CFPB, Regulation Z § 1026.24. The rows pair each triggering term with the full set of required disclosures; all three disclosures are required whenever any triggering term appears._

## Common mistakes

- **Discounting and financing.** Giving the cash discount and eating the dealer fee cuts margin twice.
- **Leading with the longest term.** It wins the sale but can leave a homeowner paying for a water heater after it's been replaced.
- **Quoting a payment from memory.** Rate sheets change; run the current plan every time.
- **Skipping the disclosures.** A payment on a flyer, website or text without the APR and terms is a compliance problem.
- **Not tracking financed jobs separately.** Dealer fees are a cost of sale; book them so your margins stay honest.

BRIX builds the quote, sends it with payment options you set, and follows up on open estimates automatically, so a homeowner who hesitated at the total sees the monthly number before they call the next company.

- [Quotes and estimates](https://www.brix.so/features/quotes-estimates): Builds accurate quotes on site and follows up on every open estimate.
- [Sales automation](https://www.brix.so/features/sales-automation): Follows up every lead and open estimate automatically by text and email, and asks every customer for a review after the job.

## Frequently asked questions

### How do I calculate a monthly payment for a customer?

Use the loan formula: amount financed × (APR ÷ 12) ÷ (1 − (1 + APR ÷ 12)^−months). For $12,500 at 9.99% over 60 months that's $265.53. The calculator above does the math from your lender's terms.

### What is a dealer fee in customer financing?

It's the percentage the lender deducts from your payout in exchange for offering the homeowner a given plan. Lower customer rates and 0% promotions cost the contractor more. It belongs in your job cost like a credit card fee.

### Can I charge more to customers who finance?

Sometimes, within limits. Lender agreements often prohibit higher prices for financed jobs, and some states regulate surcharges and credit pricing. Check your lender contract and state law before you build the fee into a separate financed price.

### Can I advertise 'payments as low as' a certain amount?

Only with the full terms alongside it. Under Regulation Z, stating a payment amount triggers the requirement to also show the down payment, repayment terms and APR. Use your lender's approved disclosure language.

### Does offering financing increase sales?

It gives homeowners a way to say yes to a repair or replacement they can't pay for in one check, which usually helps close rates and ticket size on big jobs. Measure it: track the close rate and average ticket on quotes presented with a payment versus without.

### What's the difference between a 0% promotion and a low-APR plan?

A 0% (same-as-cash) promotion gives the homeowner no interest if paid within the promo period, and the lender recovers its cost through a higher dealer fee to you. A low-APR plan charges the homeowner interest over a longer term with a lower fee for you.

## Related

- [Job Pricing Calculator for Contractors](https://www.brix.so/tools/job-pricing-calculator)
- [Markup and Margin Calculator](https://www.brix.so/tools/markup-margin-calculator)
- [Equipment Loan Calculator for Contractors (Trucks, Vans, Machinery)](https://www.brix.so/tools/equipment-loan-calculator)
- [How to Follow Up on an Estimate](https://www.brix.so/learn/how-to-follow-up-on-an-estimate)
- [What Is Good-Better-Best Pricing?](https://www.brix.so/learn/good-better-best-pricing)
- [What Is Close Rate?](https://www.brix.so/learn/close-rate)
- [Contractor estimating software that quotes on site and chases every open estimate](https://www.brix.so/features/quotes-estimates)
- [Lead Follow-Up Automation That Chases Every Lead and Estimate for You](https://www.brix.so/features/sales-automation)
- [Maintenance Agreement Pricing Calculator](https://www.brix.so/tools/maintenance-agreement-calculator)
- [Flat Rate Pricing Calculator](https://www.brix.so/tools/flat-rate-pricing-calculator)

## Sources

- [CFPB, Regulation Z § 1026.24, Advertising](https://www.consumerfinance.gov/rules-policy/regulations/1026/24/) (checked 2026-10-12)
- [CFPB, What is the difference between a loan's interest rate and its APR?](https://www.consumerfinance.gov/ask-cfpb/what-is-the-difference-between-a-loans-interest-rate-and-its-apr-en-733/) (checked 2026-10-12)

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Written by BRIX Editorial Team. Last updated 2026-10-12. General information, not tax, legal or financial advice.
Canonical: https://www.brix.so/tools/customer-financing-calculator