Business Loan EMI Calculator
Match the instalment to your cash flow — EMI, total interest and the year-wise outstanding balance on working-capital or term loans.
Year-wise repayment
| Year | Principal | Interest | Balance |
|---|---|---|---|
| 1 | ₹1,55,290 | ₹1,11,643 | ₹8,44,710 |
| 2 | ₹1,74,985 | ₹91,948 | ₹6,69,725 |
| 3 | ₹1,97,177 | ₹69,756 | ₹4,72,547 |
| 4 | ₹2,22,184 | ₹44,749 | ₹2,50,363 |
| 5 | ₹2,50,363 | ₹16,570 | ₹0 |
Borrow at a pace your cash flow can absorb
A business loan only works when the instalment is one your cash flow can absorb in a weak month, not just an average one. The EMI is a fixed claim on revenue that is anything but fixed — so the right question is not "what can we borrow?" but "what repayment survives our worst quarter?"
This calculator turns a quoted rate into that answer: the monthly EMI, total interest, total repayment and a year-wise schedule of the outstanding balance. Use it to size term loans for equipment, expansion or working capital before you commit.
The EMI formula
EMI = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)
- P — the loan amount (principal)
- r — the monthly interest rate: annual rate ÷ 12 ÷ 100
- n — the number of monthly instalments (tenure in months)
This is the reducing-balance convention every bank uses: interest accrues each month on the balance still outstanding, so early EMIs are interest-heavy and later ones repay mostly principal. At a zero rate the EMI degrades to a flat principal split. The year-wise schedule under the widget buckets the instalments into 12-month windows whose closing balance lands exactly on zero.
How to use this calculator
- Enter the loan amount — ₹1 lakh to ₹5 crore.
- Set the interest rate (5–20% p.a.). Unsecured business loans commonly run 14–20%; secured or MSME-scheme loans can be much lower. Use the reducing-balance rate from the sanction letter.
- Set the loan tenure in years and months — up to 15 years here; most unsecured business loans run 1–5 years.
- Read the monthly EMI, total interest and total payment.
- Map the year-wise repayment table against your projected cash flows — the balance column is also the amount you would need to settle if you refinance.
A worked example
₹10,00,000 at 12% p.a. for 5 years:
- Monthly EMI: ₹22,244.45 for 60 months
- Total interest: ₹3,34,666.86
- Total payment: ₹13,34,666.86
That EMI is roughly ₹2.67 lakh a year of committed outflow — the financing only makes sense if the equipment or stock it funds earns more than that.
Match the tenure to what the loan buys
Finance long-lived assets long and short-lived needs short. The same ₹10,00,000 at 12% over 3 years costs ₹33,214.31 a month with ₹1,95,715.15 of interest; over 5 years the EMI eases to ₹22,244.45 but interest climbs to ₹3,34,666.86 — about ₹1.39 lakh more for the breathing room.
Funding a seasonal stock cycle with a 5-year loan means paying interest long after the stock is sold; funding a 10-year machine with a 2-year loan strangles cash flow. The tenure should roughly track the life of what it finances.
Yes — interest on money borrowed for the business is a deductible revenue expense when you compute business profits, under either personal tax regime. The exception is presumptive taxation (Sections 44AD/44ADA): the deemed profit rate is considered to already cover all expenses, so interest is not separately deductible there. Processing fees are generally deductible as well.
It varies more than any retail loan: roughly 9–12% for well-collateralised or scheme-backed MSME loans from banks, and 14–24% for unsecured business loans from banks and NBFCs, driven by vintage, turnover, banking history and credit scores. Under the CGTMSE scheme, eligible micro and small enterprises can access collateral-free loans with a guarantee cover — scheme limits are revised periodically.
No — it models term loans with fixed EMIs. Overdrafts and cash-credit charge interest daily on only the amount utilised, with no fixed instalment. For working capital that fluctuates, an OD is often cheaper than a term loan of the same headline rate; for a one-time purchase, a term loan's discipline usually wins.
Often not. RBI's bar on floating-rate foreclosure charges has historically applied to loans to individuals for non-business purposes, so business loans commonly carry foreclosure charges of 2–5% per the agreement. Regulatory directions in this area are evolving — check your sanction letter and weigh the charge against the interest saved.
Keep the sanction letter, statements and interest certificates — interest claimed as a business expense should reconcile with the lender's figures. If your accounts are audited, loan-level details go into the audit report. EasyTax's filing flow covers business income including these deductions.