How is business loan EMI calculated?

Business loan EMI uses the reducing-balance formula: EMI = P × r × (1+r)^n ÷ ((1+r)^n − 1), where P is the loan amount, r the monthly interest rate and n the number of months. A one-time processing fee is charged on top, usually deducted from the disbursed amount.

Is business loan interest tax-deductible?

Yes. Interest paid on a loan used for business purposes is generally an allowable business expense, reducing your taxable business profit. The principal repayment is not deductible. Confirm treatment with your accountant.

What tenure do business loans have?

Unsecured business loans typically run 1 to 5 years. A shorter tenure means a higher EMI but less total interest, which matters at the higher rates business loans usually carry.

Business Loan EMI Calculator (India)

Business Loan EMI Calculator

Plan your business loan repayment. Enter the loan amount, interest rate, tenure and processing fee to see the monthly EMI, total interest, the fee, and the amount actually disbursed to your account.

How it's calculated

The EMI is computed on a reducing balance from your loan amount, rate and tenure. A one-time processing fee — usually 1–3% of the loan plus GST — is charged upfront, so the amount that reaches your account is the loan minus that fee, even though you repay EMIs on the full loan. The true cost of borrowing is the total interest plus the fee.

EMI = P × r × (1+r)^n ÷ ((1+r)^n − 1). Interest on a business loan is generally a deductible business expense; the principal is not. Keep tenure short to limit interest.

Frequently asked questions

Secured or unsecured?

This tool models a standard term loan. Unsecured business loans carry higher rates; secured loans against property or receivables are cheaper but need collateral.

Can I prepay a business loan?

Usually yes, though lenders may charge a foreclosure fee on the outstanding. Prepaying early saves the most interest.

How is this different from a personal loan?

Mechanically it's the same EMI maths; business loans just tend to be larger and are used for business, making the interest deductible. See the personal loan calculator too.

Business Loan EMI Calculator

Your business loan

How it's calculated

Frequently asked questions