Business Loan EMI CalculatorEstimate Your Monthly Installments & Interest Outgo
Quickly estimate your monthly installments and total interest outgo. Adjust the principal, rate, and tenure sliders below or type in the values to see your repayment schedules.
Loan parameters
Total principal amount to borrow from the bank. Type or drag to adjust.
Proposed annual interest rate (e.g. MUDRA Kishore is typically 9.50% - 12.00%).
Repayment term in years (maximum for MUDRA is usually 5 years; some MSME limits go up to 15 years).
Monthly Installment (EMI)
₹10,809
Payment Breakdown
Ready to apply? Banks require a project report alongside your EMI amortisation.
Generate Report FormUnderstanding Business Loan EMIs
When applying for a commercial loan under government schemes like PM MUDRA, PMEGP, or CGTMSE, knowing your Equated Monthly Installment (EMI) is critical. It determines your monthly cash flow requirements and directly impacts your debt coverage ratio.
The Mathematical Formula
Banks calculate your EMI using the standard reducing-balance amortisation formula:
Where:
- E: Equated Monthly Installment (EMI)
- P: Principal Loan Amount
- r: Monthly interest rate (Annual Rate / 12 / 100)
- n: Number of monthly payments (Tenure in Years × 12)
Why Use this Calculator?
- Accurate Budgeting: Know exactly how much cash you need to set aside every month.
- DSCR Optimization: Your Debt Service Coverage Ratio (DSCR) must stay above 1.25 for bank approval. Knowing your EMI helps you plan your required net income.
- Compare Tenures: Instantly check how choosing a 3-year vs 5-year tenure changes your interest burden.
Frequently Asked Questions (FAQs)
What is the difference between Flat and Reducing interest rates?
In a flat interest rate, interest is calculated on the full principal throughout the tenure. In a reducing rate (which is standard for all MSME & MUDRA loans), interest is calculated only on the remaining unpaid principal. This calculator uses the reducing balance method.
Are there any hidden charges in loan EMIs?
While the EMI contains only principal and interest, banks charge one-time processing fees (usually 0.5% to 2% of the loan amount, though MUDRA Shishu has zero fees) and stamp duty.