Bounce Back Loan Options Calculator
Compare your BBL repayment options side by side — standard repayment, Pay As You Grow, interest-only periods, and refinancing.
By LoanLens · Updated February 2026
How this calculator works
We calculate your repayments under each available scenario using the standard amortisation formula at 2.5% (the fixed BBL rate). For the refinancing comparison, we use a typical secured term loan rate of 7.5% — the midpoint of what we consider a “good” rate for secured lending.
The comparison almost always confirms that BBLs are cheaper than refinancing. The main value of this calculator is helping you decide between the Pay As You Grow options if you need lower monthly payments.
Pay As You Grow explained
Extend to 10 years. Reduces your monthly payment significantly but increases total interest. Available once. Rate stays at 2.5%.
Interest-only periods. Pay only the interest for 6 months. Available up to 3 times. Balance doesn't reduce during this period.
Payment holidays. Pay nothing for up to 6 months. Interest still accrues. Available once. Use as a last resort — it's the most expensive option.
Should you refinance a BBL?
Almost certainly not. At 2.5% with no early repayment charges, Bounce Back Loans are exceptionally cheap by any market standard. A typical unsecured business loan charges 10–18% APR, and even secured lending is 6–12%. Refinancing means replacing cheap debt with expensive debt.
Our Exit Penalty Calculator can help if you want to model a consolidation scenario (BBLs have no exit penalty, so set “penalty type” to No Penalty).
Related guides
Frequently asked questions
Can I repay my BBL early?
Yes, at any time, with no penalties. You can make partial or full early repayments. This is one of the most generous features of the BBL scheme.
How do I extend my BBL to 10 years?
Contact your lender directly and request a term extension under Pay As You Grow. They're required to offer this option. You can only do this once.
Can I combine PAYG options?
Yes. You can extend to 10 years AND take interest-only periods AND take a payment holiday. These are separate options with individual limits.
Is my BBL affected by interest rate rises?
No. Bounce Back Loans are fixed at 2.5% for the full term, regardless of what happens to the Bank of England base rate.
LoanLens provides information and educational tools, not regulated financial advice. We are not authorised or regulated by the Financial Conduct Authority. Calculator results are estimates based on the information you provide and typical market data. Always seek independent professional advice before making financial decisions.
What are your Bounce Back Loan options in 2026?
Bounce Back Loans were issued at 2.5% fixed APR with a 6-year term (extendable to 10 years via Pay As You Grow). The scheme is now closed to new applicants, but around 1.5 million UK businesses still have active BBLs. If you're finding repayments difficult, or simply want to understand your total cost under each scenario, this calculator models all your available options.
Because BBLs carry no early repayment charges, you are free to overpay or fully repay at any time without penalty. This makes BBLs unusual in the business lending market — most commercial loans carry some form of ERC.
Pay As You Grow — what the options actually mean
Pay As You Grow (PAYG) was introduced by the government in 2021 to help BBL borrowers who were struggling with repayments. The three options are:
- Extend to 10 years: Reduces your monthly payment significantly but increases total interest paid. Available once.
- Interest-only for 6 months: Monthly payment drops to interest only — your capital balance does not reduce during this period. Available up to three times over the loan life.
- Payment holiday for 6 months: No payments for 6 months — interest still accrues and is added to the balance. Available once. Does not affect your credit score.
Should you refinance your BBL?
At 2.5% APR, your BBL is almost certainly the cheapest business finance you will ever access. Refinancing into a commercial loan at a higher rate simply to release equity or consolidate debt will cost you more over time. The main reasons to consider refinancing are: you need to borrow additional funds and want a single facility, or you want to consolidate your BBL with other higher-rate debt to simplify repayments. Our BBL refinancing guide explores this in detail.