Business Loan EMI Calculator
Business loans in India typically run for 1 to 5 years at 11-18% p.a. Because the rate is higher than a home loan, total interest cost matters even more. Use this calculator to model the EMI before you sign a facility letter.
By FinancePaisa Editorial Team · Research & editorialUpdated
₹
%
Compare lenders’ current rates on the loan rates page.
years
₹
Paid after every 12th EMI, with the EMI kept the same so the loan closes sooner.
What this means
Every ₹1 lakh you borrow costs ₹2,733 a month on these terms.
Your monthly EMI₹54,653
Principal 76%Interest 24%
Principal₹20.00 lakh
Total interest₹6.23 lakh
Total you repay₹26,23,342
Could you pay it off faster? Try the prepayment calculatorYear-by-year schedule
| Year | Principal paid | Interest paid | Split | Balance at year end |
|---|---|---|---|---|
| 1 | ₹4,00,914 | ₹2,54,921 | ₹15,99,086 | |
| 2 | ₹4,60,788 | ₹1,95,048 | ₹11,38,298 | |
| 3 | ₹5,29,603 | ₹1,26,233 | ₹6,08,695 | |
| 4 | ₹6,08,695 | ₹47,141 | ₹0 |
- Year 1Balance ₹15,99,086Principal ₹4,00,914Interest ₹2,54,921
- Year 2Balance ₹11,38,298Principal ₹4,60,788Interest ₹1,95,048
- Year 3Balance ₹6,08,695Principal ₹5,29,603Interest ₹1,26,233
- Year 4Balance ₹0Principal ₹6,08,695Interest ₹47,141
Figures use the standard reducing-balance method and are rounded to the nearest rupee. Your lender's schedule may differ slightly because of rounding and the date of your first EMI.
How to size a business loan EMI
A safe rule of thumb: total EMIs across all business borrowings should stay under 40% of your monthly free cash-flow (revenue minus fixed costs minus taxes). At ₹20 lakh, 14%, 4 years, EMI is roughly ₹54,679 - your business needs to comfortably generate at least ₹1.4 lakh in free monthly cash-flow.
Rate benchmarks to use
- 11-13% — established MSMEs, HDFC/SBI, strong financials
- 13-16% — typical private bank rate for mid-vintage MSMEs
- 16-19% — NBFC-lender rate for younger businesses or thin file
- 20%+ — fintech / unsecured loans on 12 months of GST only
Tips to lower total interest
- Choose the shortest tenure your cash-flow allows
- Negotiate the processing fee down to 1-1.5%
- Prefer term loans over cash-credit if usage will be steady
- Consider CGTMSE-backed loans for up to ₹5 crore — no collateral, lower rates
Frequently asked questions
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