Letter of Credit Calculator
Calculate bank fees, confirmation fees, and total costs for a letter of credit based on amount, bank commission rate, confirmation rate, and term.
How to Use the Letter of Credit Calculator
- Enter the LC amount.
- Enter the bank commission rate (% per annum).
- Enter the confirmation rate (% per annum).
- Enter the LC term in days.
- Click Calculate to see bank fee, confirmation fee, and total.
Casi d'Uso
- •Estimating LC costs before opening a letter of credit.
- •Comparing confirmed vs unconfirmed LC costs.
- •Incorporating LC fees into trade financing budgets.
- •Negotiating LC terms with banking partners.
Formula
Bank fee = LC amount × bank commission% × days / 360. Confirmation fee = LC amount × confirmation% × days / 360. Total = bank fee + confirmation fee.
Domande Frequenti
What is a letter of credit?
A letter of credit is a bank guarantee ensuring payment to a seller once agreed delivery conditions are met, reducing trade risk.
What does confirmation add?
A confirmed LC adds a second bank's guarantee of payment, reducing risk when the issuing bank is in a less stable country.
How are LC fees typically charged?
LC fees are usually charged as a percentage per annum or per quarter on the LC amount, prorated for the LC term.