SBI Business Loan EMI Calculator India Jul 2021

• Business loan EMI (or equated monthly installment) is a fixed amount of money paid by you to SBI against the loan taken. This is towards repayment of your loan to the bank. Every month, it is due on a fixed day of the month till your loan is fully paid back.
• SBI offers business loans with loan tenure up to 48 months that translates into a lowest loan EMI of ₹ 2,594 per lakh, which makes it affordable for business loan borrowers. Lowest Rate of interest offered by SBI on business loan is 11.20%.

Business loan EMI for ₹ 10 Lakh loan amount at lowest 11.20% interest rate offered by SBI for different tenures

	1 year	2 year	4 year
SBI EMI for loan amount of ₹ 10 Lakh at 11.20%	₹ 88,475	₹ 46,701	₹ 25,943
Total amount you pay back to the bank including principal and interest	₹ 11,16,792	₹ 12,47,225	₹ 15,55,571
Interest you have to pay over loan tenure	₹ 1,16,792	₹ 2,47,225	₹ 5,55,571

• The above table shows the longer your loan tenure, lower is the EMI you pay on the loan. However, your total interest outgo is significantly higher in a long tenure loan. In the above example, if you take ₹ 10 Lakh loan for a period of 4 years, you pay the lowest EMI of ₹ 25,943. However, you pay an interest of ₹ 5,55,571 on a ₹ 10 Lakh loan.
• In contrast, if you take a ₹ 10 Lakh loan from SBI at the lowest loan rate offered for a period of 1 year, you pay a higher loan EMI of ₹ 88,475 and pay an interest of only ₹ 1,16,792 which is less than half of what you paid in a 4 year loan. Hence, it is advisable to choose your loan tenure wisely as longer tenure means high interest expenses.

• Loan amount - This is the amount borrower promises to repay to the bank with the interest applied. SBI gives minimum business loan of ₹ 5,00,000 up to an amount of ₹ 1,00,00,00,000.
• Interest rate - Interest rate is the rate charged over the principal amount borrowed. Higher interest rate increases your loan EMI which will increase the total cost of the loan. Lowest interest rate offered by SBI is 11.20%. Do complete market research and compare rates online before you apply for a business loan.
• Loan tenure - This is the period in which you can repay your business loan to the bank. Longer loan tenure means lower loan EMI. Generally, SBI offers business loan for a maximum tenure of 48 months.

SBI Business Loan amortization schedule gives a break up of your monthly EMI into interest and principal repayment. SBI 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 ₹ 7 Lakh for 3 years from SBI at an interest rate of 11.20%. EMI calculated for this loan amount is ₹ 22,983 and the total annual EMIs to be paid annually is ₹ 2,75,801. The EMI schedule of loan for 3 years is explained below in the table –

Amortization Schedule for a Business Loan of ₹ 7 Lakh over the 3 years

Year	Interest paid during the year	Principal repaid during the year	Total amount paid during the year (Interest + Principal)	Outstanding Principal
2021	₹ 36,868	₹ 1,01,033	₹ 1,37,901	₹ 5,98,967
Jul	₹ 6,533	₹ 16,450	₹ 22,983	₹ 6,83,549
Aug	₹ 6,380	₹ 16,604	₹ 22,983	₹ 6,66,946
Sep	₹ 6,225	₹ 16,759	₹ 22,983	₹ 6,50,187
Oct	₹ 6,068	₹ 16,915	₹ 22,983	₹ 6,33,272
Nov	₹ 5,911	₹ 17,073	₹ 22,983	₹ 6,16,199
Dec	₹ 5,751	₹ 17,232	₹ 22,983	₹ 5,98,967
2022	₹ 56,030	₹ 2,19,772	₹ 2,75,801	₹ 3,79,196
Jan	₹ 5,590	₹ 17,393	₹ 22,983	₹ 5,81,574
Feb	₹ 5,428	₹ 17,555	₹ 22,983	₹ 5,64,018
Mar	₹ 5,264	₹ 17,719	₹ 22,983	₹ 5,46,299
Apr	₹ 5,099	₹ 17,885	₹ 22,983	₹ 5,28,414
May	₹ 4,932	₹ 18,052	₹ 22,983	₹ 5,10,363
Jun	₹ 4,763	₹ 18,220	₹ 22,983	₹ 4,92,143
Jul	₹ 4,593	₹ 18,390	₹ 22,983	₹ 4,73,753
Aug	₹ 4,422	₹ 18,562	₹ 22,983	₹ 4,55,191
Sep	₹ 4,248	₹ 18,735	₹ 22,983	₹ 4,36,456
Oct	₹ 4,074	₹ 18,910	₹ 22,983	₹ 4,17,546
Nov	₹ 3,897	₹ 19,086	₹ 22,983	₹ 3,98,460
Dec	₹ 3,719	₹ 19,264	₹ 22,983	₹ 3,79,195
2023	₹ 30,112	₹ 2,45,690	₹ 2,75,801	₹ 1,33,506
Jan	₹ 3,539	₹ 19,444	₹ 22,983	₹ 3,59,751
Feb	₹ 3,358	₹ 19,626	₹ 22,983	₹ 3,40,125
Mar	₹ 3,175	₹ 19,809	₹ 22,983	₹ 3,20,316
Apr	₹ 2,990	₹ 19,994	₹ 22,983	₹ 3,00,322
May	₹ 2,803	₹ 20,180	₹ 22,983	₹ 2,80,142
Jun	₹ 2,615	₹ 20,369	₹ 22,983	₹ 2,59,773
Jul	₹ 2,425	₹ 20,559	₹ 22,983	₹ 2,39,214
Aug	₹ 2,233	₹ 20,751	₹ 22,983	₹ 2,18,463
Sep	₹ 2,039	₹ 20,944	₹ 22,983	₹ 1,97,519
Oct	₹ 1,844	₹ 21,140	₹ 22,983	₹ 1,76,379
Nov	₹ 1,646	₹ 21,337	₹ 22,983	₹ 1,55,042
Dec	₹ 1,447	₹ 21,536	₹ 22,983	₹ 1,33,505
2024	₹ 4,395	₹ 1,33,506	₹ 1,37,901	₹ 0
Jan	₹ 1,246	₹ 21,737	₹ 22,983	₹ 1,11,768
Feb	₹ 1,043	₹ 21,940	₹ 22,983	₹ 89,828
Mar	₹ 838	₹ 22,145	₹ 22,983	₹ 67,683
Apr	₹ 632	₹ 22,352	₹ 22,983	₹ 45,331
May	₹ 423	₹ 22,560	₹ 22,983	₹ 22,770
Jun	₹ 213	₹ 22,771	₹ 22,983	₹ 0

In the above illustration, on a SBI Business Loan of₹ 7 Lakh, taken at the lowest interest rate of 11.20, EMI paid is ₹ 22,983 and an annual total of EMIs is ₹ 2,75,801, the interest component is ₹ 67,945 while the principal component is ₹ 2,07,857 in year 1 of loan disbursement. You repay only 29.69% of the total principal after paying 12 EMIs during the first year.

P*r* (1+r)^n/([(1+r)^n]-1)
Here is an illustration of how SBI business loan EMI is calculated:
In above formula,
P = Loan amount. This can range from ₹ 5,00,000 to ₹ 1,00,00,00,000
r = Rate of interest per month. Current rate is 11.20%
n = tenure in month. For SBI, this can be 48 months

• Ascertain the amount you need to borrow: It is important that before approaching SBI for business loan, you need to estimate the amount of loan you need to borrow. Remember business loan is an unsecured short term loan, and hence it is advisable to minimize your loan amount to the extent possible. Also, based on the EMI you can service, try to opt for lowest tenure of loans as long tenure loans result in huge interest outgo.
• Review your current obligations: Before taking loan from SBI, it is advisable to do an evaluation of your current monthly expenses including any EMI obligations that you have on your current loans. The assessment will help you to estimate the amount of EMI you can pay comfortably after taking into account other obligations. Once you arrive at the EMI you can service, you can also decide on the right loan tenure.

✅What is the calculation of SBI Business Loan EMI?

Business Loan EMI (or equated monthly installment) is a fixed amount of money paid by you to SBI against the loan taken. This is towards repayment of your loan to the bank. Every month, it is due on a fixed day of the month till your loan is fully paid back.

• Business Loan EMI (or equated monthly installment) is a fixed amount of money paid by you to SBI against the loan taken. This is towards repayment of your loan to the bank. Every month, it is due on a fixed day of the month till your loan is fully paid back.
• With SBI offering business loan with loan tenure up to 48 months, the loan EMI can be as low as ₹ 2,594 per lakh, to make it more affordable and convenient to meet your business needs. Rate of interest offered by SBI are as low as 11.20%. You can check EMI for other tenures using our SBI business loan calculator.
• This EMI consists of both interest payment and principal repayment. Though the EMI amount will remain constant, the principal component keeps increasing and on the other hand the interest component keeps reducing.

✅How does MyLoanCare business loan calculator calculate EMI?

This calculator calculates EMI considering a combination of loan amount, interest rate and loan tenure.

• This calculator considers “reducing balance basis” and assumes that payment of EMI is made in arrears (means interest is charged for the month preceding the EMI payment date) and not in advance.

✅Will the SBI business loan EMI remain constant or change in future? What happens in case of increase or decrease in interest rate?

Typically, the business loan EMI remains unchanged unless the customer requests for a change and the same is approved by SBI subject to its eligibility conditions (note that nominal charges may apply for effecting a customer initiated change in EMI).

• In case the floating rate of interest on your business loan increases, SBI will typically keep the EMI constant but increase the loan tenure. So, you will pay the same EMI but for a longer duration. In case the interest rates increase to an extent that the revised loan tenure is more than the maximum permissible by SBI, the bank may increase your EMI amount.
• For partly disbursed loans availed under tranche EMI scheme, your loan EMI will increase with each disbursement.

✅Will business loan EMI change in case of prepayment?

SBI allows prepayment at nil charges or penalty in case of floating rate business loans.

• When you make a prepayment, the outstanding principal amount on your loan reduces. In this case, you may choose to either keep the EMI same and reduce the loan tenure (that is paying off the loan faster) or reduce the EMI and keep the loan tenure same (that is paying lesser amount every month). It is beneficial to keep the EMI constant and reduce the loan tenure as you pay less interest to the bank in this option.

✅Why should I calculate SBI loan EMI before taking a loan?

In case EMI comes out to be more than your monthly budget, then you have the chance to apply for a lower loan amount which fits your monthly budget and makes EMI easily affordable.

• If you already know the EMI you have to pay each month, then you can plan your expenses accordingly.
• Based on the EMI amount, you can opt for making prepayment of your business loan in future when you have surplus amount.

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