Letter of Credit Cost Calculator — LC Fees for International Trade

Calculate letter of credit costs for international trade. Issuance fees, advising charges, confirmation, amendment and utilisation fees — all in one total.

Quick answer: Typical LC costs: Issuance 0.1–0.3% of value (min $150), advising $75–$150, confirmation 0.2–0.5% for higher-risk countries. A $100,000 LC typically costs $500–$1,200 all-in.

🏦 Letter of Credit Cost Calculator

LC Value (USD)

LC Tenor (days)

Issuance Fee Rate (% per quarter)

Typical: 0.15–0.30% per quarter

Issuance Minimum Fee ($)

Advising Bank Fee ($)

Confirmation Fee (% — if required)

0 if unconfirmed. 0.2–0.8% for higher-risk countries.

Expected Amendments

$75–$150 each

Amendment Fee ($)

Total LC Cost

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Issuance Fee

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Confirmation Fee

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How to Use This Calculator

Enter LC value and tenor — the face value of the letter of credit and how many days until expiry.
Enter issuance rate — your bank charges a percentage per quarter — check with your trade finance team.
Add confirmation fee — if buying from a higher-risk country, the seller's bank may require confirmation. Leave 0 if not needed.
Add amendments — each change to LC terms after issuance costs $75–$150. Keep amendments to a minimum — get terms right first time.

Worked Example

$100,000 LC, 90-day tenor, 0.20% issuance, $100 advising, 0.35% confirmation, 1 amendment.

Issuance: $100,000 × 0.20% = $200 (above $150 min)
Advising: $100
Confirmation: $100,000 × 0.35% = $350
Amendment: $100
Total: $750 (0.75% of LC value)

LCs add about 0.5–1.5% to transaction cost but provide security for both buyer and seller. For established suppliers with good payment history, open account (net 30/60) or Documentary Collections are cheaper alternatives.

Frequently Asked Questions

LCs are used when buyer and seller don't have an established trust relationship, the transaction value is high, the country risk is elevated, or the buyer's creditworthiness is unknown to the seller. They're standard for first-time transactions with new suppliers and common in trade with certain developing markets.

An unconfirmed LC means only the issuing bank (buyer's bank) guarantees payment. A confirmed LC adds the advising bank's guarantee — the seller can collect from the confirming bank even if the issuing bank defaults. Confirmation costs extra but protects against country risk and bank default.