Commercial & MSME Finance Tool
Business Loan Calculator: EMI & Amortization Schedule
Estimate your exact monthly EMI, total interest liability, and overall loan repayment cost. Compare tenures, calculate processing fees, and view a complete year-by-year principal amortization schedule.
Loan Parameters
Reducing Balance Formula
₹10,00,000
₹
Typical MSME / Working Capital loans range from ₹1 Lakh to ₹1 Crore+.
12.5%
%
Banks typically offer 9% - 15%, NBFCs range between 14% - 24%.
3 Years (36 Mo)
₹15,000 + GST
Monthly Repayment
Per Month
Monthly EMI
₹33,457
Principal + Monthly Reducing Interest
| Principal Loan Amount: | ₹10,00,000 |
| Total Interest Payable: | ₹2,04,442 |
| Processing Fee (incl. 18% GST): | ₹17,700 |
| Total Amount Payable: | ₹12,04,442 |
| Net Loan Disbursed to Bank: | ₹9,82,300 |
Principal: 83%
Interest: 17%
Yearly Loan Repayment Schedule (Amortization)
| Year | Opening Balance | EMI Paid | Principal Paid | Interest Charged | Closing Balance |
|---|
How Business Loan EMI is Calculated
Standard Monthly Reducing Balance Formula
Banks and lending institutions use the standard compound interest reducing balance formula to compute equimarginal installments (EMI):
EMI = [P × r × (1 + r)^n] / [(1 + r)^n − 1]
- P: Principal Loan Amount borrowed
- r: Monthly Interest Rate = (Annual Interest Rate / 12 / 100)
- n: Loan tenure in total number of months (Years × 12)
What is the difference between Secured and Unsecured Business Loans?
Secured business loans require collateral (machinery, property, or fixed deposits) and offer lower interest rates (typically 8.5% to 13%). Unsecured loans (like CGTMSE or fintech business loans) require no collateral but carry higher interest rates (14% to 24%).
Is Business Loan Interest Tax Deductible in India?
Yes! Interest paid on loans taken for business expansion, working capital, or equipment purchase is recognized as a legitimate business expense under Section 36(1)(iii) of the Income Tax Act, reducing your net taxable business profits.
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