Calculate EMI, Interest, Tax Benefits & More
✓ 5 Loan Types - Term, Working Capital, Equipment
✓ Tax Benefits - Calculate interest deductions
✓ Loan Comparison - Compare multiple offers
Max for Term Loan: ₹5,00,00,000
Typical for Term Loan: 11%
= 36 months total
= ₹10,000 upfront
Documentation, legal, etc.
Interest-only period
Total Upfront Costs: ₹10,000
Interest is 100% tax-deductible for businesses
A Business Loan Calculator is an advanced financial tool that helps business owners entrepreneurs and companies calculate monthly EMI Equated Monthly Installments total interest payable total loan cost effective interest rate tax benefits prepayment savings and complete amortization schedule for various types of business loans including term loans working capital loans equipment financing invoice discounting and expansion loans by considering loan amount interest rate tenure processing fees insurance charges grace periods EMI frequency tax bracket and prepayment options enabling accurate financial planning optimal loan selection and cost minimization.
Our advanced calculator includes EMI calculation using the standard formula EMI equals Principal times Monthly Interest Rate times One plus Monthly Interest Rate to the power of Number of Months divided by One plus Monthly Interest Rate to the power of Number of Months minus One providing accurate monthly payment amounts, total cost breakdown showing principal amount total interest payable processing fees insurance charges and other upfront costs giving complete picture of loan expenses, effective interest rate calculation that accounts for all fees and charges not just nominal interest rate helping compare true cost across different lenders, tax benefit calculator recognizing that business loan interest is fully tax-deductible under Income Tax Act calculating tax savings based on your tax bracket 20% 25% or 30% showing net cost after tax benefits, prepayment impact calculator showing how lump-sum prepayments at specific months reduce total interest and shorten loan tenure with exact savings calculation, loan comparison tool allowing side-by-side comparison of multiple loan offers from different banks and NBFCs highlighting best option based on total cost, complete amortization schedule showing month-by-month breakdown of EMI principal component interest component and outstanding balance for entire loan tenure, grace period support for loans with interest-only periods common in business expansion and project financing, multiple EMI frequency options including monthly quarterly and yearly payments for different business cash flow cycles, and five different loan types with typical interest rate benchmarks including term loans at 11% for business expansion working capital loans at 13% for operational expenses equipment financing at 10% for machinery and assets invoice financing at 15% for cash flow management and expansion loans at 12% for growth initiatives making it the most comprehensive business loan calculator in India for 2025.
✓Fixed loan amount & tenure
✓11-13% interest rate
✓1-10 years repayment
✓Best for: Business expansion, assets
Up to ₹5 Cr for established businesses
✓Short-term funding
✓12-15% interest rate
✓6 months - 3 years
✓Best for: Daily operations, inventory
Up to ₹2 Cr for operational needs
✓Asset-backed lending
✓9-12% interest rate
✓3-7 years tenure
✓Best for: Machinery, vehicles, tech
Up to ₹3 Cr for equipment purchase
✓Invoice-backed funding
✓14-18% interest rate
✓30-90 days tenure
✓Best for: Cash flow, receivables
Up to ₹1 Cr against pending invoices
✓Growth & scaling funds
✓10-14% interest rate
✓5-15 years tenure
✓Best for: New branches, acquisitions
Up to ₹10 Cr for expansion projects
EMI = [P × r × (1 + r)^n] / [(1 + r)^n - 1]
Where: P = Principal loan amount, r = Monthly interest rate (Annual rate / 12 / 100), n = Number of months
Example: Loan = ₹10,00,000, Interest = 12% p.a., Tenure = 36 months
Monthly Rate (r) = 12 / 12 / 100 = 0.01
EMI = [10,00,000 × 0.01 × (1.01)^36] / [(1.01)^36 - 1]
EMI = [10,00,000 × 0.01 × 1.4308] / [0.4308] = ₹33,214
Total Interest = (EMI × Number of Months) - Principal
Example: EMI = ₹33,214, Tenure = 36 months, Principal = ₹10,00,000
Total Payment = 33,214 × 36 = ₹11,95,704
Total Interest = 11,95,704 - 10,00,000 = ₹1,95,704
Effective Rate = [(Total Cost - Principal) / Principal / Tenure in Years] × 100
Example: Principal = ₹10,00,000, Processing Fee (2%) = ₹20,000
Total Interest = ₹1,95,704, Tenure = 3 years
Total Cost = 1,95,704 + 20,000 = ₹2,15,704
Effective Rate = (2,15,704 / 10,00,000 / 3) × 100 = 7.19% p.a. effective
(Nominal rate was 12%, but effective rate considering fees is higher)
Tax Savings = Total Interest × Tax Rate / 100
Example: Total Interest = ₹1,95,704, Tax Bracket = 30%
Tax Savings = 1,95,704 × 30 / 100 = ₹58,711
Net Interest Cost = 1,95,704 - 58,711 = ₹1,36,993
(Interest on business loans is 100% tax-deductible as business expense)
Savings = Original Total Interest - New Total Interest After Prepayment
Example: Original Total Interest = ₹1,95,704
Prepayment of ₹2,00,000 after 12 months reduces remaining principal
New Interest on reduced principal for remaining 24 months = ₹98,520
Interest Savings = 1,95,704 - 98,520 = ₹97,184
(Prepayment significantly reduces interest burden and shortens tenure)
Interest for Month = Outstanding Principal × Monthly Rate
Principal for Month = EMI - Interest for Month
Example: Month 1 with ₹10,00,000 principal, 1% monthly rate
Interest = 10,00,000 × 0.01 = ₹10,000
Principal = 33,214 - 10,000 = ₹23,214
New Balance = 10,00,000 - 23,214 = ₹9,76,786
(Each month, interest decreases as principal reduces)
To calculate business loan EMI in India use the standard EMI formula where EMI equals Principal amount times Monthly interest rate times One plus Monthly interest rate to the power of Number of months divided by One plus Monthly interest rate to the power of Number of months minus One then add processing fees insurance and other charges to calculate total cost and factor in tax benefits as business loan interest is 100% tax-deductible reducing net cost significantly.
Step-by-Step EMI Calculation:
Step 1: Convert Annual Rate to Monthly
Annual Interest Rate = 12% per annum
Monthly Interest Rate (r) = 12 / 12 / 100 = 0.01 (1%)
Step 2: Apply EMI Formula
Principal (P) = ₹10,00,000
Monthly Rate (r) = 0.01
Tenure (n) = 36 months
EMI = [P × r × (1+r)^n] / [(1+r)^n - 1]
EMI = [10,00,000 × 0.01 × 1.4308] / [0.4308]
EMI = ₹33,214 per month
Step 3: Calculate Total Cost
Total Payment = EMI × Tenure = 33,214 × 36 = ₹11,95,704
Total Interest = Total Payment - Principal = ₹1,95,704
Processing Fee (2%) = ₹20,000
Total Cost = ₹12,15,704
Step 4: Apply Tax Benefit (30% bracket)
Tax Savings = Interest × 30% = 1,95,704 × 0.30 = ₹58,711
Net Cost After Tax = ₹11,57,000 (Saves ₹58,711!)
💡 Pro Tip: Always calculate effective interest rate including processing fees and other charges. A 12% nominal rate can become 13-14% effective rate after fees!
Business loan interest is 100% tax-deductible as business expense under Income Tax Act Section 36(1)(iii) meaning entire interest amount can be claimed as deduction from business income reducing taxable profit and overall tax liability making business loans highly tax-efficient with effective cost reduced by 20-30% depending on tax bracket unlike personal loans where interest is not deductible providing significant savings for companies LLPs partnerships and proprietorships.
Tax Deduction Eligibility:
Real Example - Tax Savings Impact:
Scenario: SME Company taking ₹50,00,000 loan at 12% for 5 years
Total Interest over 5 years = ₹16,24,000
Company Tax Rate = 30%
Tax Savings = ₹16,24,000 × 30% = ₹4,87,200
Net Interest Cost = ₹16,24,000 - ₹4,87,200 = ₹11,36,800
Effective Interest Rate = 4.54% after tax (from 12% nominal!)
Comparison: Personal loan at 12% has NO tax benefit, full 12% cost
How to Claim Tax Benefit:
⚠️ Important: Only interest is tax-deductible, NOT principal repayment. Principal reduces profit but not deductible as expense. Maintain clear accounting separation!
Loan tenure choice depends on your business cash flow profitability and ROI where shorter tenures 1-3 years mean higher monthly EMI but significantly lower total interest cost and faster debt freedom ideal for profitable businesses with strong cash flow while longer tenures 3-7 years mean lower monthly EMI preserving working capital but higher total interest cost better for startups growing businesses or those needing cash flow flexibility requiring careful analysis of monthly affordability versus total cost optimization.
Advantages:
Disadvantages:
Best For: Profitable businesses, equipment loans, strong cash flow, high-margin operations
Advantages:
Disadvantages:
Best For: Startups, expansion, working capital, seasonal businesses, preserving cash
Comparison Example - ₹10 Lakh Loan at 12%:
| Tenure | Monthly EMI | Total Interest | Total Cost |
|---|---|---|---|
| 1 year | ₹88,849 | ₹66,188 | ₹10,66,188 |
| 2 years | ₹47,073 | ₹1,29,752 | ₹11,29,752 |
| 3 years | ₹33,214 | ₹1,95,704 | ₹11,95,704 |
| 5 years | ₹22,244 | ₹3,34,640 | ₹13,34,640 |
| 7 years | ₹17,289 | ₹4,52,288 | ₹14,52,288 |
Difference: 1-year vs 7-year = Save ₹3,86,100 in interest (but EMI 5× higher)
💜 Smart Strategy: Choose longer tenure for lower EMI, then make annual prepayments from profits to reduce tenure and interest. Best of both worlds!
Loan prepayment or making lump-sum payments toward principal significantly reduces total interest cost and shortens loan tenure because interest is calculated on outstanding principal so reducing principal earlier in loan tenure saves substantial interest on future payments with savings compounding over remaining tenure making prepayment one of most effective strategies to minimize business loan cost especially when business generates excess cash profits bonuses or seasonal income allowing strategic debt reduction.
How Prepayment Works:
Loan Structure: ₹20,00,000 at 12% for 5 years (60 months)
Monthly EMI = ₹44,489
Total Interest (without prepayment) = ₹6,69,340
Prepayment Scenario: ₹5,00,000 prepayment after 24 months
1. After 24 EMIs, principal paid = ₹6,32,800
2. Outstanding balance = ₹13,67,200
3. Make ₹5,00,000 prepayment
4. New outstanding = ₹8,67,200
5. Recalculate EMI for remaining 36 months
6. New EMI = ₹28,804 (vs original ₹44,489)
Savings:
Interest saved = ₹2,87,420
Time saved = 0 months (chose to reduce EMI, not tenure)
New monthly saving = ₹15,685 in cash flow!
Prepayment Strategies:
Prepayment Rules & Charges:
💡 Pro Tip: Calculate ROI before prepayment. If business ROI > loan rate (e.g., 25% ROI vs 12% loan), invest in business. If ROI < loan rate, prepay loan!
Term loans and working capital loans serve different business purposes where term loans are long-term fixed-amount loans for capital expenditure like machinery equipment vehicles property expansion with 1-10 year tenure lower interest rates 10-13% and structured EMI repayment while working capital loans are short-term revolving credit for operational expenses like inventory salaries rent utilities with 6-36 month tenure higher interest rates 12-16% and flexible repayment understanding differences helps choose right financing for specific business needs.
Purpose:
Features:
Best For:
Example: ₹50 Lakh loan for purchasing manufacturing equipment, 5-year tenure at 11% = ₹1,08,718 monthly EMI
Purpose:
Features:
Best For:
Example: ₹10 Lakh overdraft facility at 14% - Pay interest only on amount used, flexible withdrawal/repayment
Key Differences Summary:
| Aspect | Term Loan | Working Capital |
|---|---|---|
| Duration | Long-term (1-10 years) | Short-term (6 months - 3 years) |
| Use | Assets, expansion, capex | Operations, inventory, expenses |
| Interest | Lower (10-13%) | Higher (12-16%) |
| Repayment | Fixed monthly EMI | Flexible (overdraft/revolving) |
| Collateral | Usually required | Often unsecured |
| Amount | Higher (₹5L - ₹5Cr+) | Lower (₹1L - ₹2Cr) |
💼 Smart Strategy: Use term loan for assets (lower rate, longer tenure), working capital for operations (flexibility, faster approval). Many businesses need both!
Our Free Business Loan Calculator is the most comprehensive and advanced EMI calculator for business loans in India helping businesses entrepreneurs SMEs MSMEs startups and companies calculate monthly EMI total interest payable total loan cost effective interest rate tax benefits prepayment savings and complete amortization schedule for various business loan types including term loans working capital loans equipment financing invoice discounting and expansion loans with unique features like five loan type presets with industry-standard interest rate benchmarks processing fee calculator adding 1-3% upfront costs to show true loan expense insurance and other charges input for complete cost visibility grace period support for interest-only moratorium periods common in project and expansion financing multiple EMI frequency options including monthly quarterly and yearly payments matching different business cash flow cycles tax benefit calculator recognizing that business loan interest is 100% tax-deductible under Section 36(1)(iii) of Income Tax Act showing tax savings based on 20% 25% or 30% tax brackets reducing effective interest cost by one-third making business loans significantly cheaper than personal loans prepayment impact calculator showing exact savings from lump-sum prepayments at any month with recalculated EMI tenure and interest demonstrating how strategic prepayments can save lakhs in interest loan comparison tool allowing side-by-side analysis of multiple loan offers from different banks NBFCs and fintech lenders highlighting best option based on EMI total cost and effective rate complete month-by-month amortization schedule showing principal component interest component and outstanding balance for entire loan tenure helping understand how payments are allocated and effective versus nominal interest rate comparison revealing true cost including all fees and charges often 1-2% higher than advertised rate enabling accurate comparison across lenders making it the most trusted powerful user-friendly business loan calculator available for Indian market updated for 2025.
The calculator supports all major business loan calculations with EMI formula using standard methodology EMI equals Principal times Monthly Interest Rate times One plus Monthly Interest Rate to power of Number of Months divided by One plus Monthly Interest Rate to power of Number of Months minus One providing mathematically accurate monthly payment amounts used by all banks and financial institutions in India, total interest calculation showing cumulative interest paid over entire loan tenure by multiplying EMI by number of months and subtracting principal revealing true cost of borrowing often 40-60% of loan amount for 5-year loans at 12-14% interest, processing fee and charges calculation adding upfront costs like processing fee typically 1-3% of loan amount insurance charges documentation fees legal charges and other miscellaneous expenses to show total money leaving business account at loan disbursement often ₹20,000 to ₹50,000 for ₹10 lakh loan, effective interest rate calculation that accounts for all fees and upfront costs not just nominal interest rate showing true annualized cost of borrowing typically 1-2 percentage points higher than advertised rate for example 12% nominal becomes 13-14% effective after fees enabling accurate comparison across lenders who may advertise lower rates but charge higher fees, tax benefit calculation multiplying total interest by applicable tax bracket 20% for LLPs/partnerships in lower income bands 25% for domestic companies with turnover below ₹400 crore or 30% for companies with higher turnover showing tax savings from interest deduction with net interest cost calculated as gross interest minus tax savings effectively reducing 12% loan to 8.4% after 30% tax benefit making business loans extremely tax-efficient compared to personal loans where interest is not deductible, prepayment savings calculator allowing input of prepayment amount and timing then recalculating remaining loan schedule showing interest saved and tenure reduced demonstrating power of early prepayments where ₹2 lakh prepayment after 1 year on ₹10 lakh 5-year loan can save ₹80,000-₹1,00,000 in interest and reduce tenure by 12-15 months providing clear ROI on using profits for debt reduction, and complete amortization schedule generation showing month-by-month breakdown starting with Month 1 where interest component is highest gradually shifting toward principal component in later months with outstanding balance decreasing systematically to zero at end of tenure helping businesses understand payment structure plan cash flows and track loan reduction over time.
Perfect for all business types whether you are small business owner proprietor running retail shop restaurant service business calculating affordable loan for inventory equipment working capital needs, startup founder entrepreneur seeking funding for business launch technology development market entry calculating term loan for capital expenditure working capital for operations determining optimal loan amount and tenure for cash flow sustainability, SME manufacturer running production facility factory calculating equipment financing for machinery purchase technology upgrade capacity expansion determining monthly EMI impact on cash flow and profitability, MSME trader wholesaler distributor calculating working capital loan for inventory purchase seasonal stock build-up managing cash flow gaps between purchases and sales, established company corporate entity calculating expansion loan for new branch office geographical expansion market entry determining total cost with tax benefits for financial planning, consultant professional service provider calculating business loan for office setup technology infrastructure team hiring determining affordable EMI from service revenue, online business ecommerce seller marketplace vendor calculating working capital for inventory marketing working capital needs determining loan structure matching seasonal revenue patterns, restaurant hospitality business owner calculating equipment financing for kitchen equipment furniture interiors determining loan tenure matching asset depreciation, real estate developer builder contractor calculating project financing construction loan for ongoing projects determining EMI affordability from project cash flows, or any business entity needing financing to understand calculate plan optimize business loan costs and structure. Use this calculator for loan affordability analysis determining maximum loan amount affordable based on monthly revenue and cash flow, interest cost comparison across different lenders banks NBFCs fintech comparing total cost not just interest rate to find best deal, tenure optimization analysis comparing shorter versus longer tenures balancing monthly EMI affordability against total interest cost, tax planning showing net cost after tax benefits helping CFOs accountants optimize debt structure, prepayment strategy planning calculating optimal prepayment amounts and timing to minimize interest using excess profits strategically, loan refinancing evaluation comparing current loan terms with new offers to determine savings from refinancing, cash flow planning projecting monthly outflows for loan repayment alongside other business expenses, financial modeling including loan costs in business plans projections and funding proposals, lender negotiation armed with accurate calculations and comparison data to negotiate better rates terms, or any situation requiring accurate comprehensive strategic business loan analysis and planning making it the most trusted comprehensive powerful business loan calculator in India suitable for all industries manufacturing trading services technology retail hospitality real estate across all business sizes from micro enterprises with ₹1-5 lakh loans to large corporations with ₹5-10 crore facilities. The tool is 100% free with no registration required no email signup needed no calculation limits no ads or distractions mobile-friendly responsive interface working perfectly on smartphones tablets laptops desktops completely private and secure your loan details stay in browser never stored on servers never shared with anyone updated daily with latest loan trends interest rates and best practices helping thousands of Indian businesses calculate optimize secure best business loans daily making informed borrowing decisions optimizing debt costs and building financially sustainable growing businesses.