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Business Loan EMI Calculator India

Business Loan Calculator

Last Updated 20th Jan 2022

  • Lowest business loan EMI as on 20 Jan 2022 is ₹ 2,327 per lakh.
  • Banks offering lowest EMI on business loan are Bank of Baroda.
Loan Amount1 Year Loan3 Year loan5 Year loan
₹ 1 Lakh₹ 8,979₹ 3,418₹ 2,327
₹ 5 Lakh₹ 44,894₹ 17,089₹ 11,634
₹ 10 Lakh₹ 89,787₹ 34,178₹ 23,268
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Bank/NBFCs Rate* EMI per Lakh* Action

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Lowest Business Loan EMI per lakh Jan 2022

Download Rates
Bank Lowest EMI per lakh Max Tenure
SBI Business Loan EMI Calculator ₹ 2,594 48 months
HDFC Bank Business Loan EMI Calculator ₹ 2,628 48 months
ICICI Bank Business Loan EMI Calculator ₹ 3,540 36 months
RBL Bank Business Loan EMI Calculator ₹ 3,640 36 months
Tata Capital Business Loan EMI Calculator ₹ 2,990 48 months
Lendingkart ₹ 3,321 36 months
Bajaj Finserv ₹ 2,938 48 months
IDFC First Bank ₹ 2,990 48 months
IIFL ₹ 2,432 60 months
Bank of Maharashtra ₹ 3,442 36 months
IndusInd Bank ₹ 2,275 60 months
Kotak Bank ₹ 2,432 60 months
Fullerton India ₹ 2,886 48 months
Ftcash ₹ 3,615 36 months
Indifi ₹ 3,467 36 months
Neogrowth ₹ 5,287 24 months
IDBI Bank ₹ 2,237 60 months
Allahabad Bank ₹ 1,902 84 months
Yes Bank ₹ 3,528 36 months
PNB ₹ 2,257 60 months
OBC ₹ 1,763 84 months
Indian Overseas Bank ₹ 2,174 60 months
Dhan Laxmi Bank ₹ 2,149 60 months
DCB Bank ₹ 2,088 60 months
Andhra Bank ₹ 2,419 60 months
United Bank of India ₹ 2,275 60 months
Corporation Bank ₹ 1,849 84 months
Syndicate Bank ₹ 2,257 60 months
Bank of Baroda ₹ 3,423 36 months

As per the current rate of 14.00%, DCB Bank offers the lowest business loan EMI of ₹ 2,327 for 5 years on per lakh loan amount. The EMI can vary depending upon the interest rate, loan amount and loan tenure. Higher the loan amount, higher will be the EMI.

Factors affecting Business loan EMI

  • Loan amount – The amount you need to borrow for business expansion or purpose. Higher the loan amount, higher will be the EMI.
  • Rate of interest – The interest rate on a loan is an important determinant of the EMI. Higher the interest rate, higher will be the EMI and vice-versa.
  • Loan Tenure – Longer the loan tenure, lower the EMI. Longest loan tenure for business loan in India is 5 years.

The following table provides a comparison of EMI for a ₹ 1 Lakh loan at different tenures:

For a business loan at 14.00% interest rate, the EMI per ₹ 1 Lakh loan amount is as below:

Loan Tenure 2 years 3 years 5 years
EMI amount for loan amount ₹ 1 Lakh at 14.00% ₹ 4,801 ₹ 3,418 ₹ 2,327
Total amount you pay back to the bank including principal and interest ₹ 1,31,681 ₹ 1,51,107 ₹ 1,98,979
Interest you have to pay over loan tenure ₹ 31,681 ₹ 51,107 ₹ 98,979
  • At the lowest business loan rate of 14.00% for a maximum tenure of 5 years, the lowest EMI translates to ₹ 2,327 per lakh. In this case, you have to pay an interest of ₹ 98,979 on your loan amount of ₹ 1 Lakh over a period of 5 years.
  • If you decide to take a loan for 2 years only, for the same rate of interest you will pay a higher EMI of ₹ 4,801. In this scenario you pay a total interest of ₹ 31,681 on your loan amount of ₹ 1 Lakh over a period of 2 years, which is less than half of what you paid for a 5 years loan.

Business Loan Amortization Calculator

Business Loan amortization schedule gives a break up of your monthly EMI into interest and principal repayment. The Bank gives you a detailed amortisation schedule with the sanction letter and you can calculate the total interest outgo as well as the pace at which your loan amount will be repaid during the loan tenure.

How to read an amortization schedule

Suppose if you take a Business Loan of ₹ 8 Lakh for 4 years from at an interest rate of 14.00%. EMI calculated for this loan amount is ₹ 21,861 and the total annual EMIs to be paid annually is ₹ 2,62,334. The EMI schedule of loan for 4 years is explained below in the table –

Amortization Schedule for a Business Loan of ₹ 8 Lakh over the 4 years

Year Interest paid during the year Principal repaid during the year Total amount paid during the year (Interest + Principal) Outstanding Principal
2022 ₹ 1,01,968 ₹ 1,60,366 ₹ 2,62,334 ₹ 6,39,634
2023 ₹ 78,019 ₹ 1,84,315 ₹ 2,62,334 ₹ 4,55,319
2024 ₹ 50,493 ₹ 2,11,841 ₹ 2,62,334 ₹ 2,43,478
2025 ₹ 18,856 ₹ 2,43,478 ₹ 2,62,334 ₹ 0
In the above illustration, on a Business Loan of ₹ 8 Lakh, taken at the lowest interest rate of 14.00%, EMI paid is ₹ 21,861 and an annual total of EMIs is ₹ 2,62,334, the interest component is ₹ 1,01,968 while the principal component is ₹ 1,60,366 in year 1 of loan disbursement. You repay only 20.05% of the total principal after paying 12 EMIs during the first year.

Business Loan EMI Calculator Formula

It is difficult to calculate EMI manually as it is a very long and time consuming process. To calculate EMI, you need to know about the loan amount, interest charged on the amount and the tenure for which you want to borrow the amount. The mathematical formula by which business loan EMI is calculated is mentioned below

P*r* (1+r)^n/([(1+r)^n]-1)

In above formula,

P is the loan amount that you want to borrow

r is the rate of interest per month

n is the tenure of loan repayment in months

It is advised to calculate loan EMI by using EMI calculator which gives you quick and accurate estimates.

Business Loan Calculator Benefits

EMI calculator business loan calculates your EMI and has multiple benefits, which are listed below:

  • Time saving : Using EMI calculator calculates EMI in seconds and saves your time in doing cumbersome calculations. You only need to enter the basic loan details like loan amount, interest rate and loan tenure to calculate the loan EMI.
  • Accurate results : Manual calculations can sometimes lead to wrong calculations and hence, wrong results. EMI calculator allows you to calculate error free EMI instantly.
  • Plan your finances : Calculating EMI allows to assess if you would be able to service a particular level of EMI, based on your income and savings level.
  • Allows to evaluate multiple schedules: EMI calculator also allows you to view the amortization schedules and EMIs for various combinations of loan tenures and interest rates, thus allowing you to choose the EMIs that suits your repayment or servicing capabilities.

Business Loan Prepayment

Part prepayment is the amount that you decide to pay before the end of loan tenure, if you have surplus money. When you part prepay your loan, bank gives you two options:

  • To reduce your EMI and keep the tenure same
  • To keep the EMI same and reduce your repayment tenure.

The choice between the two options depends on your monthly repayment capacity. We have explained the way in which EMI or tenure re-adjust after part prepayment of loan in the illustration below:

Suppose you take a loan of ₹ 7,00,000 for 5 years at an interest rate of 13.50%. Your loan EMI works out at ₹ 16,106 per month, with annual EMIs of ₹ 1,93,282. This is how your original loan schedule looks like till Year 5.

On loan amount of ₹ 7 Lakh, you make payment of ₹ 16,106 every month and annual payment of ₹ 1,93,282. By the end of year 3, you have outstanding principal of ₹ 3,37,127 and you have to pay another 24 EMIs to fully pay down your loan. The original schedule of your loan till year 3, has been shown in the table below:

Amortization Schedule for a business loan of ₹ 10 Lakh over the 5 year period
Loan Amount ₹ 7 Lakh
Tenure (in months) 60
Interest Rate 13.50%
Monthly EMI, Rs. 16,106

Loan schedule Principal repaid Principal outstanding
Year 1 ₹ 1.05 Lakh ₹ 5.95 Lakh
Year 2 ₹ 1.20 Lakh ₹ 4.75 Lakh
Year 3 ₹ 1.37 Lakh ₹ 3.37 Lakh

Now at the end of year 3, you have surplus amount of ₹ 1 Lakh and you decide to prepay the loan. You have two options:

Option 1: Reduce your loan tenure and keep your EMI same

Option 2: Reduce your EMIs and keep the loan tenure unchanged

Option 1: Reduce your loan tenure and keep your EMI same

If you have ₹ 1 Lakh as surplus amount and decide to keep the EMI same and reduce the tenure, this is what will happen.

At the end of 3 years, when you prepay an amount of ₹ 1 Lakh, outstanding principal is reduced to ₹ 2.37 Lakh as compared to ₹ 3.37 Lakh in your original schedule. As your loan outstanding reduces and you opt to reduce your loan tenure, at the end of 3 years you are left to pay only 17 more EMIs compared to 24 EMIs as planned in your original loan schedule. As a result of this change, your total loan tenure gets reduced to 53 months compared to 60 months, which was scheduled earlier. Please refer to table below to understand the EMI calculations in case of a prepayment:

Revised Schedule, after prepayment of ₹ 1,00,000 at the end of year 3
Option 1: Same EMI, shorter tenure
Loan Amount ₹ 7 Lakh
Tenure (in months) 60
Interest Rate 13.50%
Monthly EMI, Rs. 16,106
Early Payment, Rs. ₹ 1 Lakh in 3rd year

Loan schedule Principal repaid Principal outstanding
Year 1 ₹ 1.05 Lakh ₹ 5.95 Lakh
Year 2 ₹ 1.20 Lakh ₹ 4.75 Lakh
Year 3 ₹ 2.37 Lakh ₹ 2.37 Lakh
Year 4 ₹ 1.93 Lakh ₹ 43,845

Option – 2 : Reduce your EMI and keep the loan tenure same

At the end of 3 years, when you prepay an amount of ₹ 1 Lakh outstanding principal is reduced to ₹ 2.37 Lakh as comparison to ₹ 4.75 Lakh in your original schedule. As your loan outstanding reduces and you opt to reduce EMI, your revised EMI stands at ₹ 11,329 compared to ₹ 16,106 earlier. Your remaining loan tenure remains unchanged at 24 months and you pay an EMI of ₹ 11,329 which is lower by ₹ 4,777 as per your original loan amortisation schedule. Please refer to table below to understand the EMI calculations in case of a prepayment under Option 2:

Revised Schedule, after prepayment of ₹ 1,00,000 at the end of year 3
Option 2: Same tenure, lower EMI
Loan Amount ₹ 7 Lakh
Tenure (in months) 60
Interest Rate 13.50%
Early Payment, Rs. ₹ 1 Lakh in 3rd year

Loan schedule Monthly EMI Principal repaid Principal outstanding
Year 1 16,106 ₹ 1.05 Lakh ₹ 5.95 Lakh
Year 2 16,106 ₹ 1.20 Lakh ₹ 4.75 Lakh
Year 3 16,106 ₹ 2.37 Lakh ₹ 2.37 Lakh
Year 4 11,329 ₹ 1.11 Lakh ₹ 1.26 Lakh
Year 5 11,329 ₹ 1.26 Lakh 0

However, you still pay higher interest compared to Option 1, in which you decide to reduce your loan tenure after prepayment. If you plan to prepay, continuing to pay same EMI over a shorter tenure can result in significantly lower interest amount on your loan and hence, should be the preferred choice whenever possible.

FAQs

What if I miss EMI payment or there is an ECS bounce?

If you miss your EMI payment or if there is an ECS bounce then bank may charge a penalty. In addition, it will also be reflected in your CIBIL report and your CIBIL score may get impacted.

What if I get delay in paying the business loan EMI?

Banks charges penalty for delaying EMI payment. The amount of penalty varies from bank to bank.

Why it is necessary to calculate EMI beforehand?

It is important to calculate your EMI in advance to maintain stability in future payments. When you avail loan, you promise the bank to pay a fixed amount at fixed date every month. So, before availing the loan you should consider the stability of your income, monthly expenses and the existing loan obligations to avoid any discrepancies in future payments.

Does the loan tenure affect my EMI for business loan?

Business loan can be availed for maximum tenure of 5 years. Tenure affects your monthly EMI. Longer the tenure of business loan, lower will be your EMI.

How MyLoanCare EMI calculator helps in calculating EMI?

MyLoanCare EMI calculator for business loan calculates the EMIs of different banks as per the details entered by you. You can easily compare the EMIs and opt for the best option. You also get to know about the interest charged on loan amount entered.

How is business loan EMI calculated?

You can calculate EMI of your business loan through our “Business loan EMI Calculator” which uses combination of loan amount, loan tenure and interest rate to calculate loan EMI instantly online.

  • The EMI calculator also tells you how much interest you would pay throughout the loan tenure. Longer the loan tenure, more the amount of interest for same loan amount you have to pay.

What will be my monthly EMI?

Monthly EMI depends upon your income and expenses. Generally, banks advise you to limit your EMI to 35% to 45% of your net income so that you can pay your EMI without any burden or difficulty. You can calculate your EMI online which will help you to know your repayment capacity.

Is the business loan EMI fixed or can it change in future?

Here are some situations in which your EMI can change:

  • Banks generally offer floating rate of interest on business loans if interest rates increases but banks typically keep the EMI constant and increase the loan tenure. So, you will pay same EMI but for a longer duration. However, if your loan tenure is maximum (as per permissible limit) then your bank may increase the EMI amount.
  • For partly disbursed loans availed under tranched EMI scheme, your loan EMI will increase with each disbursement.
  • You can prepay your loan or you can opt to reduce your EMI and keep the loan tenure same or keep the EMI unchanged and reduce the loan tenure. It is more beneficial to keep the EMI same and reduce the loan tenure.
  • However, you may opt to reduce the EMI in case you so desire.
  • Any other situations as per terms and conditions of the loan agreement.

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