Free tool
Business loan EMI calculator
Monthly EMI, total interest and a year-by-year repayment schedule for a business loan, on the reducing-balance method banks use.
| Year | Principal paid | Interest paid | Balance |
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The EMI formula
EMI = P × r × (1 + r)n ÷ ((1 + r)n − 1), where P is the loan, r the monthly rate (annual rate ÷ 12 ÷ 100) and n the number of months. For ₹10,00,000 at 10% for 5 years: r = 0.008333…, n = 60, and the EMI is ₹21,247.04. Over 60 months you pay ₹12,74,822 in all, of which about ₹2,74,822 is interest.
How the schedule works
Each month, interest is charged on the balance still owed, and the rest of the EMI pays down the loan. Early EMIs are mostly interest; later ones mostly principal. The last instalment is adjusted by a few paise so the balance ends at exactly zero. The calculator uses exact decimal arithmetic, so the totals add up to the paisa.
Before you borrow
- Compare the annual percentage rate including processing fees, not just the interest rate.
- Ask whether the rate is fixed or floating, and what prepayment costs.
- Interest on a loan used for business is generally a business expense; ask your CA how it applies to you. GST is charged on processing fees, not on the interest.
Does a shorter tenure save money?
Yes. The EMI goes up, but you pay interest for fewer months. Try 3 and 5 years above to see the difference in total interest.
Why is my bank’s EMI slightly different?
Banks may round the EMI up to the rupee, charge interest from the disbursal date, or add insurance. The method is the same.
Does this work for a zero-interest offer?
Yes. At 0% the EMI is the loan divided by the months.
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