1. What is the Business Loan Payment Formula?

The business loan payment formula calculates the fixed monthly payment (EMI) required to repay a loan over a specified term. It's widely used by Indian banks like HDFC, SBI, and ICICI for business loan calculations.

2. How Does the Calculator Work?

The calculator uses the standard EMI formula:

Where:

• \( P \) — Principal loan amount (INR)
• \( r \) — Monthly interest rate (annual rate divided by 12)
• \( n \) — Loan term in months
• \( PMT \) — Monthly payment (EMI in INR)

Example: For a ₹10,00,000 loan at 11% p.a. for 5 years (60 months), the monthly payment would be ₹21,742.

3. Importance of Loan Calculation

Details: Accurate EMI calculation helps businesses plan finances, compare loan offers, and understand total borrowing costs before committing to a loan.

4. Using the Calculator

Tips: Enter principal in INR, annual interest rate (e.g., 11.00 for 11%), and loan term in years. Common Indian business loan rates range from 10% to 18% p.a.

5. Frequently Asked Questions (FAQ)

Q1: What are typical business loan rates in India?
A: Rates vary by bank and borrower profile but generally range from 10% to 18% p.a. for established businesses.

Q2: How does loan tenure affect payments?
A: Longer tenures reduce EMI but increase total interest paid. Shorter tenures have higher EMIs but lower total cost.

Q3: Are there prepayment charges?
A: Many Indian banks charge 2-5% for prepayment within first 1-3 years. Check with your lender.

Q4: What's the minimum business vintage required?
A: Most banks require 3+ years of business operations for standard business loans.

Q5: Are there tax benefits?
A: Interest paid on business loans is typically deductible as a business expense under Income Tax Act.