Loan Amount

1 lac

2 Cr



6 Months

36 Months


Interest Rate




Principal Amount


Interest Amount


Monthly EMI


Total Amount Payable:


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Business or Commercial loan has been one of the most common methods of borrowing money from external sources like banks and nonbanking financial companies to start a new business venture or expansion of an existing business.

To begin with, let us understand what a loan is?

 Loan can be referred to as the money lent to an individual, organization, or other domains by an individual, organization, or financial entity. The recipient of the investment is then liable to pay regular interest on the loan amount as well as repay the principal amount borrowed within a stipulated time frame, by way of EMIs. 

 What is an Commercial Loan EMI?

An EMI (Equated Monthly Instalment) is a pre-decided fixed amount to be paid on a specific date each month by the borrower of a loan to clear off an outstanding loan within the set-out time frame. An EMI amount includes the interest plus the principal amount accrued on the loan amount.

Factors that affect Commercial loan EMIs:

  • Principal borrowed – The actual loan amount you need to hire to start or expand a business. Higher the principal loan amount higher will be the EMI payable and vice-versa.
  • Rate of interest – One of the prime factors affecting the EMI amount is the rate of interest. Higher the rate of interest, higher will be the EMI payable and vice-versa.
  • Tenure of the loan – Longer the loan tenure, lower will be the EMI payable. Currently, the longest loan tenure for business loans in India is five years.
  • Monthly rest period – Under the monthly rest period, the interest is worked out based on the outstanding loan amount, which means with every EMI that you pay, there is a reduction in interest over time. 
  • Annual rest period – Under annual rest, even with the payment of regular EMIs, the interest calculated on the loan amount will be re-evaluated only at the end of each year (12 months).

Commercial loan EMI calculator

 Even though each EMI of your loan will be equal, the components of the EMI i.e., interest and principal amount will vary every month. During the initial days of loan repayment, the interest amount is higher, and the principal amount is lower, while gradually, the interest amount reduces as your total outstanding loan amount goes down and the primary component increases.

Calculating EMIs manually can be a very time consuming and complicated process. This is where a Commercial loan EMI calculator comes in handy. A Commercial loan EMI calculator is an online tool that helps you calculate your loan equated monthly installments based on the details you provide. 

How does the Commercial loan EMI calculator work?

For calculation of EMIs using Commercial loan EMI calculator, you need to know the below details of the loan:

  • The total loan amount
  • Rate of interest charged on the amount
  • The loan tenure

The mathematical formula for calculation of Commercial loan EMI is: 

E = P * R * (1+R)^N / ((1+R)^N-1), where;

  • E is EMI (Equated Monthly Instalment)
  • P is the principal loan amount borrowed
  • R is the rate of interest
  • N is the loan tenure in months

Step by Step method of calculating EMIs using Commercial loan EMI calculator:

  1. Enter the loan amount for which you want to apply.
  2. Enter the rate of interest applicable
  3. Select the tenure of the loan as per your repayment convenience

After entering the above details, the commercial loan calculator evaluates the below figures:

  • Total interest amount payable until the end of your loan tenure.
  • The total amount owed at the end of the mandate, which is the sum of principal and interest.
  • EMIs, which is the equated monthly amount to be paid towards your business loan.

EMI Calculator

The below table provides EMI calculation for a business loan amount of Rs 1lakh at an interest rate of 13.50% for different tenures:

Loan Tenure Two years Three years Five years
EMI payable for a loan amount of Rs. 1 lakh at 13.50% interest rate Rs. 4,778  Rs. 3,394  Rs. 2,301 
Total interest payable over the entire loan tenure Rs. 30,414  Rs. 48,931  Rs. 94,227
Total amount payable to the bank (principal + interest)  Rs.1.30 Lakh Rs.1.49 Lakh Rs.1.94 Lakh
  • As discussed above, for the longest business loan tenure of 5 years at a 13.50% interest rate, the EMI amount is the lowest at Rs 2301, and the total interest payable comes to Rs. 94,227.
  • And for the shortest loan tenure of 2 years at 13.50% interest, the EMI payable is the highest at Rs. 4,778, and the total interest payable is Rs. 30,414, less than half of what you pay for a five-year tenure.

Benefits of Commercial Loan Calculator

  • Saves time – Calculating EMIs with commercial loan calculator saves time in tedious calculations as it calculates EMIs in seconds, only by entering necessary details of your loan.
  • Accuracy – Manual calculations always carry the risk of errors, whereas calculating EMIs with commercial loan calculator provides accurate results.
  • Financial planning – Calculating accurate EMIs can help you plan your finances based on your income and savings.
  • Evaluate multiple schedules – With a commercial loan calculator. You can evaluate various amortization schedules for different combinations of loan tenures and rate of interest, thus helping you choose the EMI option that best suits your repayment potential.

Above all, a commercial loan calculator will help you make a well-informed decision about the monthly cash outflow towards your business loan repayment.

FAQs about Commercial Loan Calculator

  1. What if an EMI payment is missed in case an ECS bounces?
  2. If you miss an EMI for any reason, the lender may charge a penalty, and it may negatively impact your CIBIL score as well.
  3. Why is calculating EMIs necessary before borrowing a loan?
  4. Calculating accurate EMIs beforehand will help ensure regular future payments at a fixed date each month by planning your monthly expenses as per the loan obligations.
  5. What if there is a delay in EMI payment?
  6. Banks usually charge a penalty in case of any delay in EMI payments, though the amount of death differs from bank to bank.
  7. What should be the ideal percentage of EMIs?
  8. Usually, it is advisable to limit EMIs to no more than 35 %to 45% of your total net income, so that it can be paid hassle-free without any pressure.
  9. Can the EMI amount change in the future?
  10. Usually, the EMI amounts do not change once you have zeroed in on the loan amount, rate of interest, and tenure of the loan. However, the Government has the authority to change the rate of interest at any time, which will improve your EMI amount.
  11. When will the EMI be due each month?
  12. The EMI payment date is pre-fixed and remains the same each month. It is usually the date when you get the loan amount disbursed to your bank account.
  13. What are the modes of payment for EMIs?
  14. While most banks and NBFCs allow you to pay your monthly EMIs through ECS (electronic clearing system) or direct debit, you can also choose to pay the EMIs by depositing a cheque at the nearest branch.

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