Business Loan EMI Calculator India 2025

Estimate your monthly instalment, business setup period (moratorium) interest, total interest outgo and amortization schedule for MSME & SME term loans.

Business Loan Amount

₹

₹1L₹1Cr

Select Bank for Business Loan

Interest Rate (% p.a.)

8%30%

Loan Tenure

years

1 year10 years

Business Setup Period

What is Business Setup Period?

Time given to set up your business before starting full EMI payments. Only interest accumulates during this period and is added to your loan. Full EMI starts after your business is operational.

Monthly EMI

₹23.27 K

Principal Amount

₹10.00 L

Total Interest

₹3.96 L

EMI Repayment Period

60 months (5 years)

Total Amount Payable

₹13.96 L

Business Loan Composition

Months to pay

Principal Amount

₹10.00 L

71.6%

Interest Amount

₹3.96 L

28.4%

Interest vs Principal Ratio

0.40x

You'll pay 0.40 times the principal as interest

Payment Schedule

Showing 1 to 12 of 60 entries

Total Principal

₹10.00 L

Total Interest

₹4.03 L

Total Payable

₹14.03 L

MonthMonth

EMI

PrincipalPrin.

InterestInt.

OutstandingBalance

Nov 2025Nov 2025

₹23.38 K

₹11.71 K

₹11.67 K

₹9.88 L

Dec 2025Dec 2025

₹23.38 K

₹11.85 K

₹11.53 K

₹9.76 L

Jan 2026Jan 2026

₹23.38 K

₹11.99 K

₹11.39 K

₹9.64 L

Feb 2026Feb 2026

₹23.38 K

₹12.12 K

₹11.25 K

₹9.52 L

Mar 2026Mar 2026

₹23.38 K

₹12.27 K

₹11.11 K

₹9.40 L

Apr 2026Apr 2026

₹23.38 K

₹12.41 K

₹10.97 K

₹9.28 L

May 2026May 2026

₹23.38 K

₹12.55 K

₹10.82 K

₹9.15 L

Jun 2026Jun 2026

₹23.38 K

₹12.70 K

₹10.68 K

₹9.02 L

Jul 2026Jul 2026

₹23.38 K

₹12.85 K

₹10.53 K

₹8.90 L

Aug 2026Aug 2026

₹23.38 K

₹13.00 K

₹10.38 K

₹8.77 L

Sep 2026Sep 2026

₹23.38 K

₹13.15 K

₹10.23 K

₹8.63 L

Oct 2026Oct 2026

₹23.38 K

₹13.30 K

₹10.07 K

₹8.50 L

Business Loan Payment Breakdown

See how each instalment splits between principal and interest over time

Principal Increases

Green bars show increasing principal payments over time as you build equity

Interest Decreases

Orange bars show decreasing interest payments as outstanding balance reduces

Balance Reduces

Pink line shows your outstanding loan balance decreasing over time

Key Insights

Early years are interest-heavy, later years are principal-heavy

Prepaying early saves more on total interest

Outstanding balance decreases slowly at first, then accelerates

Optimization Tips

Make extra principal payments in the early years

Consider refinancing before the crossover point

Step-up EMIs can significantly reduce total interest

Business Loan EMI Calculation Formulas

Formulas for calculating business loan EMI and understanding business financing.

Business Loan EMI Formula

Calculate EMI for business loans with varying terms.

EMI = [P × r × (1 + r)^n] / [(1 + r)^n - 1]

Example:

₹25,00,000 business loan at 11% annual rate for 7 years

[25,00,000 × 0.00917 × (1 + 0.00917)^84] / [(1 + 0.00917)^84 - 1]

= ₹40,847

Variables:

P - Business loan amount

r - Monthly interest rate (Annual rate ÷ 12)

n - Loan tenure in months

Business Cost Analysis

Analyze total cost of business financing.

Total Cost = (EMI × n) + Processing Fees

Example:

₹40,847 EMI for 84 months with ₹1,25,000 processing fees

(40,847 × 84) + 1,25,000

= ₹35,56,148

Variables:

EMI - Monthly EMI amount

n - Loan tenure in months

Processing Fees - One-time processing charges

These formulas provide the mathematical foundation for the calculations. Actual results may vary based on rounding, compounding frequency, and specific lender policies.

Why Business Loans Are the Costliest Form of Credit

Banks price business loans higher than home, education or gold loans because they are risk-weighted & often unsecured. Higher NPAs, lack of liquid collateral and volatility in small-business cash-flows translate into heavier interest margins so that lenders can protect their bottom-line.

Key Red Flags to Keep on Your Radar

Inflated True APR

Compare effective annual rate after processing fee, GST, insurance & inspection charges. The gap vs headline rate can be 2-4%.

Cash-flow Mismatch

Align EMI date with your billing cycle. Seasonal businesses should opt for flexible repayment or OD facility.

Hidden Covenants

Monitor DSCR, stock-statement & collateral top-up clauses to avoid breach penalties.

Credit-Score Hit

Multiple enquiries in a short span reduce both CIBIL & Experian scores and signal desperation.

Collateral Top-up

Property valuation dips or stock erosion can trigger margin calls. Keep alternate security ready.

Fore-closure Fee

Fixed-rate loans can levy 2-4% of outstanding if you refinance within the lock-in period.

What Happens if You Default?

Penalty Interest: 2-4% p.m. over & above contracted rate for the overdue period.
Credit Score Damage: 30-90 day delinquency can shave off 75-100 points making future borrowing costlier.
Legal Notice & Recall: Persistent default triggers recall notice under SARFAESI Act.
Collateral Liquidation: Secured assets – property, machinery, receivables – may be attached & auctioned within 60 days of notice.
Personal Guarantees: Directors' personal assets & scores are at stake if guarantee is invoked.

Tip: If cash-flow crunch is temporary, approach the bank for restructuring or moratorium before an EMI bounces to protect your score & collateral.

How a Business Loan Can Accelerate Growth

When used prudently, debt can magnify returns and unlock new opportunities.

Purchase Inventory in Bulk

Avail supplier discounts and meet sudden spike in demand without straining working capital.

Upgrade Machinery

Modern equipment can improve productivity, reduce defects and lower operating costs.

Expand to New Markets

Finance marketing campaigns, additional inventory and distribution networks to tap new geographies.

Government Schemes that Can Lower Your Cost

Check if your enterprise qualifies for these flagship programmes.

CGTMSE – Credit Guarantee Fund Scheme

Offers credit guarantee up to ₹5 crore for micro & small enterprises, allowing lenders to sanction collateral-free loans at competitive rates.

PM MUDRA Yojana

Provides loans up to ₹10 lakh under Shishu, Kishore & Tarun categories for micro-enterprise expansion with interest subvention for prompt repayment.

Stand-Up India

Facilitates bank loans between ₹10 lakh and ₹1 crore to SC/ST or women entrepreneurs for green-field projects in manufacturing, services or trading.

Compare Business Loan Rates Across Banks

Compare business loan interest rates and find the best deals from top banks

BOI

Bank of India

8.8%

Best Rate

Min Amount

₹1L

Calculate Returns

SBI

State Bank of India

8.9%

Best Rate

Min Amount

₹1L

Calculate Returns

Indian Bank

9.0%

Best Rate

Min Amount

₹1L

Calculate Returns

IOB

Indian Overseas Bank

9.0%

Best Rate

Min Amount

₹1L

Calculate Returns

Union Bank

Union Bank of India

9.2%

Best Rate

Min Amount

₹1L

Calculate Returns

Canara Bank

9.2%

Best Rate

Min Amount

₹1L

Calculate Returns

Compare All Banks

Business Loan EMI Calculator FAQs

Everything you need to know about business loans, EMI calculation, moratorium period, setup period, and commercial financing

What is a business loan moratorium period or setup period?

A business loan moratorium period (also called setup period or pre-EMI period) is the initial time given to set up and establish your business before starting full EMI payments. During this period (typically 3-12 months), you pay only interest on the loan amount. Full EMI starts after your business becomes operational. This helps new businesses manage cash flow during the setup phase.

How does business setup period work for startup loans?

During the business setup period, you pay only simple interest monthly (pre-EMI) instead of full EMI. This interest accumulates and is added to your principal loan amount. Once the moratorium ends, regular EMI payments begin on the total amount including accumulated interest. This is especially helpful for MSME and startup businesses that need time to generate revenue.

What is a business loan EMI?

EMI (Equated Monthly Instalment) is the fixed amount you pay every month to repay your business loan, consisting of both principal and interest components.

What is the typical interest rate for business loans in India?

Interest rates for unsecured business loans generally range between 11% – 24% p.a. Secured working-capital or MSME loans can start from 8.5% p.a., depending on the lender, collateral offered and credit profile.

Should I take moratorium period for my business loan?

Yes, moratorium period is beneficial for new businesses and startups as it reduces monthly payment burden during initial setup (typically 6-36 months). You pay only interest instead of full EMI, allowing you to invest more capital in business operations. However, remember that accumulated interest increases your total loan cost.

Can I foreclose or prepay a business loan?

Yes, most lenders allow part-payment or full foreclosure after a lock-in period of 6-12 months. Pre-payment charges vary from 0% – 4% of the outstanding principal, so always check the fine-print before signing the loan agreement.

Are there any tax benefits on business loan EMIs?

Interest paid on a business loan is treated as a business expense and can be claimed as a deduction from your business income under the Income-tax Act, thereby reducing your taxable profits.

Which government schemes can reduce my effective interest cost?

Schemes like CGTMSE (Credit Guarantee Fund Trust for Micro & Small Enterprises), Stand-Up India, and MUDRA offer interest subvention or credit guarantees which help you access cheaper credit and avoid collateral requirements. Eligibility varies by turnover, enterprise size, promoter category and loan amount.

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