Business Loan EMI Calculator
Know your monthly repayment before you sign anything. See total interest cost, compare what different rates actually cost you, and plan your cash flow year by year.
Business Loan EMI Calculator
Calculate your monthly EMI, see the full interest cost, and understand what a better rate actually saves your business.
Even 2-3% difference in rate adds up significantly over the full loan. Use this table when comparing lenders.
| Rate | Monthly EMI | Total Interest | vs your rate |
|---|---|---|---|
| 12% | Rs.33,214 | Rs.1,95,715 | Save Rs.52,237 |
| 13% | Rs.33,694 | Rs.2,12,982 | Save Rs.34,970 |
| 14% | Rs.34,178 | Rs.2,30,395 | Save Rs.17,557 |
| 15% ◀ | Rs.34,665 | Rs.2,47,952 | Your rate |
| 16% | Rs.35,157 | Rs.2,65,653 | +Rs.17,701 |
| 17% | Rs.35,653 | Rs.2,83,498 | +Rs.35,546 |
| 18% | Rs.36,152 | Rs.3,01,486 | +Rs.53,534 |
All calculations use the reducing balance method and are for illustration only. Actual EMI may vary based on your lender's specific calculation methodology, processing fees, GST on charges, and disbursement date. Rates shown in the comparison table are indicative — your actual rate depends on your business profile, CIBIL score, vintage, and the lender. KarobarUdhar is an independent educational platform and is not a lender, NBFC, or financial advisor.
How to Use This Calculator
Always check whether the rate quoted is a flat rate or a reducing balance rate. This calculator uses reducing balance — the correct method used by all regulated lenders. A flat rate of 12% is equivalent to roughly a 21–22% reducing balance rate. If your lender quotes a flat rate, the actual cost is nearly double what it appears.
Understanding Your Results
Monthly EMI
This is the fixed amount you pay every month for the full loan tenure. It covers both the interest charge for that month and a portion of the principal. In the early months, most of the EMI goes toward interest. In the later months, more of it reduces the principal — this is how reducing balance works.
Total Interest
This is the total cost of borrowing — the price you pay for having access to the lender's money. On a 3-year business loan at 15%, total interest typically runs 25–30% of the loan amount. At 22%, it runs 40–45%. The rate comparison table in the calculator shows you exactly what each rate costs.
Total Payable
Loan amount plus total interest. This is the actual outflow from your business over the loan period — the real number to compare against the benefit the loan brings to your business.
Year-wise Schedule
The collapsible table shows how much principal and interest you pay in each year of the loan. Useful for cash flow planning — particularly if your business has seasonal revenue and you need to know the annual outflow before agreeing to a tenure.
Business Loan Interest Rates in India (Indicative, 2026)
Rates vary by lender type, your credit score, business vintage, and collateral. The figures below are indicative ranges only — your actual rate will depend on your specific profile.
| Lender Type | Typical Rate Range | Best suited for |
|---|---|---|
| PSU Banks (SBI, PNB, Bank of Baroda) | 10.5% – 14% | Established businesses, collateral available |
| Private Banks (HDFC, ICICI, Axis) | 12% – 18% | Good CIBIL, 3+ years vintage, clean statements |
| NBFCs (Bajaj, IIFL, Flexi) | 16% – 26% | Faster processing, flexible eligibility |
| Mudra / CGTMSE Scheme | 8.5% – 12% | Micro and small enterprises, government-backed |
Rates are indicative as of May 2026 and subject to change. Always confirm the current rate directly with the lender before applying.
Frequently Asked Questions
Is the EMI fixed throughout the loan or does it change?
For most standard business loans, the EMI is fixed for the full tenure — meaning you pay the same amount every month. Some lenders offer floating rate loans where the EMI can change if the base rate moves. This calculator assumes a fixed rate throughout.
Does the calculator include processing fees?
No. Processing fees (typically 1–3% of loan amount) are a one-time upfront cost and are not included in EMI calculations. Add the processing fee separately when calculating your total cost of borrowing.
What is a good EMI-to-income ratio for a business loan?
Most banks want total monthly EMI obligations — across all loans in your name and the business's name — to stay below 40–50% of your monthly business income. If your monthly profit is Rs. 1 lakh, your total EMI across all loans should ideally be under Rs. 40,000–50,000. Crossing this ratio is one of the most common reasons for rejection.
Can I prepay a business loan early?
Yes. Most lenders allow prepayment after a lock-in period of 6–12 months. Some charge a prepayment penalty of 2–4% of the outstanding amount; others waive it after a certain number of EMIs. Prepaying early significantly reduces total interest — especially if done in the first half of the tenure when most of your EMI is going toward interest.
My lender quoted a lower rate verbally. Why is my EMI higher than expected?
This is almost always a flat rate vs reducing balance issue. If the lender quoted a flat rate of 10%, the actual reducing balance equivalent is closer to 18–19%. Ask your lender directly: "Is this a flat rate or a reducing balance rate?" The sanction letter will also specify the method — read it carefully before signing.