Calculate your business loan EMI, total interest, and amortisation schedule, including an optional balloon payment.
Rates as of Q2 2025 (example)
| Period | Date | Payment | Principal | Interest | Balance |
|---|
A business loan EMI calculator estimates the monthly Equated Monthly Instalment (EMI) for a business loan, based on the loan amount, interest rate, and tenure. It also shows total interest payable, total repayment, and a full amortization schedule — critical for planning business cash flows and comparing loan offers from different banks, NBFCs, or fintech lenders. Business loans in India are available to proprietorships, partnerships, LLPs, private limited companies, and public limited companies for working capital, equipment purchase, business expansion, or general business purposes.
Business loan EMIs follow the same reducing balance formula used for all Indian term loans. Each EMI covers the monthly interest on the outstanding principal plus a principal repayment. The interest component decreases and the principal component increases with each payment.
Formula: EMI = [P × R × (1 + R)N] ÷ [(1 + R)N − 1], where P = loan amount, R = monthly interest rate (annual ÷ 12 ÷ 100), N = total months.
Example: ₹20,00,000 business loan at 14% per annum (example rate — enter your lender\'s sanctioned rate), 5-year tenure: Monthly EMI ≈ ₹46,530.83. Total interest ≈ ₹7,91,849.75. Total repayment ≈ ₹27,91,849.75. (Note: actual business loan rates vary significantly by lender, loan type, collateral, and business vintage.)
Business loans in India are available through a wide ecosystem of lenders: public sector banks (SBI, Bank of Baroda, PNB) for secured business loans and MSME loans; private sector banks (HDFC Bank, ICICI Bank, Axis Bank) for both secured and unsecured business loans; NBFCs (Bajaj Finance, Tata Capital, Aditya Birla Finance, Shriram Finance) for faster processing; and digital lenders and fintech platforms (Lendingkart, Flexiloans, NeoGrowth, Indifi) for small-ticket, unsecured, quick-disbursement business loans. The government\'s Pradhan Mantri MUDRA Yojana (PMMY) provides collateral-free business loans up to ₹10 lakh for micro and small enterprises under three tiers: Shishu (up to ₹50,000), Kishore (₹50,001 to ₹5 lakh), and Tarun (₹5 lakh to ₹10 lakh). MSME loans (for Micro, Small, and Medium Enterprises per Udyam registration thresholds) often qualify for priority sector lending classification at banks, making them eligible for lower rates and relaxed collateral requirements. Key credit assessment factors for business loans: business vintage (typically 2-3 years required), annual turnover, ITR-based income, CIBIL score of the promoter (700+ recommended), existing debt, and for larger amounts — collateral (property, machinery, FD). GST data, bank statements, and URC (Udyam Registration Certificate) have become important digital underwriting data points for MSMEs. The Emergency Credit Line Guarantee Scheme (ECLGS), introduced during COVID-19, provided collateral-free loans to MSMEs and is one example of the government\'s active role in Indian MSME credit market.
Business loan interest rates in India vary widely based on the lender type, loan security, and borrower profile: secured business loans (against property or machinery) from PSU banks typically range from 10-14% per annum; unsecured business loans from private banks range from 14-22%; NBFCs charge 15-26%; and fintech lenders and digital platforms may charge 18-36% for very small, short-tenure business loans. MUDRA loans from PSU banks can be as low as 8-11% for eligible micro-enterprises. The rate depends heavily on the business's CIBIL score, turnover, vintage, and whether collateral is offered.
Pradhan Mantri MUDRA Yojana (PMMY) provides collateral-free business loans to non-corporate, non-farm micro and small enterprises. Three tiers: Shishu (up to ₹50,000 for start-ups), Kishore (₹50,001-₹5 lakh for growing businesses), and Tarun (₹5 lakh-₹10 lakh for established MSMEs). MUDRA loans are available from public sector banks, regional rural banks (RRBs), cooperative banks, MFIs (microfinance institutions), and NBFCs. Eligibility: the business must be in a non-agricultural income-generating activity (manufacturing, trading, services, allied agriculture like poultry, dairy, fishing). No collateral is required under the CGTMSE guarantee scheme.
Yes — unsecured business loans (collateral-free) are available from private sector banks, NBFCs, and fintech lenders, typically for amounts up to ₹50 lakh depending on the lender. MUDRA loans under PMMY are collateral-free up to ₹10 lakh. Larger unsecured amounts (₹10-50 lakh) from private banks and NBFCs require strong financials, high CIBIL score (720+), 3+ years of business vintage, and good ITR. The CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) allows banks to offer unsecured loans to MSMEs up to ₹5 crore with a government credit guarantee, making banks more willing to lend without collateral for eligible MSMEs.
Typical documentation includes: PAN card of the business and proprietor/directors; Aadhaar for KYC; business registration documents (GST certificate, Udyam/MSME registration, trade licence, incorporation certificate); ITR for the last 2-3 years (with computation); audited balance sheet and P&L; bank statements for 12-24 months; GST returns (3B and R1 for 12 months); property documents (if secured loan); and proof of business vintage. Digital lenders increasingly use bank statement analysis and GST data as primary underwriting inputs, reducing documentation burden for smaller loans.
CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) is a guarantee scheme operated jointly by SIDBI and the Government of India that provides credit guarantees to banks and NBFCs on MSME loans up to ₹5 crore. The guarantee covers 75-85% of the loan amount in case of borrower default. This allows banks to sanction collateral-free loans to MSMEs without requiring property pledges — the lender's risk is covered by the CGTMSE guarantee. Borrowers pay a guarantee fee (typically 0.37-2% per annum depending on loan amount and rating) which is usually passed on as part of the loan cost. CGTMSE loans are available to MSMEs registered on the Udyam portal.
Yes — interest paid on a business loan is fully deductible as a business expense under the Income Tax Act (Section 37(1) for businesses). If the loan is taken for a business purpose, the interest cost reduces the taxable profit of the business, reducing the income tax payable. There is no upper cap on the deduction for genuine business-purpose interest (unlike home loan interest deductions which are capped). The principal repayment on a business loan is not deductible (it is a balance sheet item). Always maintain clear documentation that the loan was used for business purposes, as the deduction can be challenged during ITR scrutiny.
Disclaimer: This calculator provides illustrative business loan EMI estimates only. Actual loan terms depend on the lender's current rates, your business's financial profile, collateral, and credit history. Business loan rates vary significantly across PSU banks, private banks, NBFCs, and fintech lenders. MUDRA and MSME scheme eligibility is subject to government guidelines. Consult a financial adviser or CA before taking a business loan.