When a business borrows funds, the equated monthly instalment, or EMI, determines how much of the monthly cash flow goes towards loan repayment. Before applying for a business loan, working out the expected EMI can help business owners judge whether the repayment fits comfortably within their monthly budget.

A business loan EMI calculator is an online tool that estimates the monthly instalment based on the loan amount, interest rate and tenure entered by the user. It can be used any number of times with different combinations, which makes it easier to compare repayment scenarios before making a borrowing decision.

Key takeaways

• An EMI calculator estimates the monthly repayment based on loan amount, interest rate and tenure.
• Changing any one variable changes the resulting EMI, so comparing scenarios is useful before applying.
• A longer tenure generally reduces the EMI but can increase the total interest paid over the loan.
• Using the calculator beforehand can help confirm that the likely repayment fits within your cash flow.
• The figures shown are indicative; the final EMI depends on the interest rate applicable at the time of loan booking.

What is a business loan EMI, and how is it calculated?

An EMI is the fixed amount paid each month towards a loan, covering a portion of the principal and the interest due for that period. It is calculated using the loan amount, the applicable interest rate and the repayment tenure.

The standard formula used is: EMI = [P x R x (1+R)^N] / [(1+R)^N – 1], where P is the principal loan amount, R is the monthly interest rate, and N is the tenure in months.

Working this out manually can be time-consuming, particularly when comparing several loan amounts or tenures together. An online business loan EMI calculator automates the process, generating an estimated EMI within seconds.

What factors affect your business loan EMI?

Three variables determine the EMI on a business loan, and each can be adjusted independently while using the calculator.

Loan amount

A higher principal generally results in a higher EMI, all else being equal. Borrowing based on the actual requirement, rather than the maximum amount you may be eligible for, can help keep the EMI manageable.

Interest rate

Even a small difference in the applicable rate can change the EMI meaningfully over a long tenure. The rate offered typically depends on the borrower’s credit score, business vintage, loan amount and chosen tenure.

Repayment tenure

A longer tenure spreads the repayment over more months, which can lower the EMI, but it usually increases the total interest paid. A shorter tenure raises the EMI but can reduce the overall interest cost.

Example: how tenure affects EMI on the same loan amount

Consider a Rs. 20 lakh business loan taken at an indicative interest rate of 14% p.a. The table below shows how the EMI and total interest payable can vary across different tenures.

Tenure	Approx. EMI	Approx. total interest payable
36 months	Rs. 68,350	Rs. 4.6 lakh
60 months	Rs. 46,560	Rs. 7.9 lakh
96 months	Rs. 34,750	Rs. 13.4 lakh

How to use a business loan EMI calculator effectively

• Enter the amount you expect to need, rather than the maximum amount you might be eligible for.
• Try more than one tenure to compare the resulting EMI and total interest before deciding.
• Check the EMI against your average monthly cash flow, not just current or seasonal revenue.
• Account for existing EMIs and fixed obligations before finalising the tenure you can comfortably manage.
• Remember that the figures are indicative; your final rate and EMI will depend on the terms approved for your application.

Bajaj Finance Business Loan at a glance

Once you have a clear idea of your funding requirement and repayment capacity, the next step is to evaluate the loan itself. The Bajaj Finance Business Loan offers high-value loans, flexible repayment options and an end-to-end online application process.

• Loan amount: Borrow between Rs. 2 lakh and Rs. 80 lakh, depending on your eligibility.
• Interest rate: Competitive rates starting from 14% p.a., based on your credit and business profile.
• Repayment tenure: Choose a tenure between 12 and 96 months to suit your cash flow.
• Collateral: No collateral or guarantor is required.
• Application process: A fully online, paperless application process, from checking your offer to completing KYC.

How to apply for a Bajaj Finance Business Loan

Step 1: Start your application

Navigate to Business Loan on the official Bajaj Finance website.

Click on the CHECK LOAN OFFER button at the top-right corner of the page.

Enter your basic details, such as full name, PAN, date of birth, PIN code, and other relevant business details.

Step 2: Continue with verification

Click CONTINUE and proceed with your banking verification.

Step 3: Complete KYC

Complete your KYC and submit your application.

Making calculated borrowing decisions

A business loan EMI calculator is a simple planning tool, but it can meaningfully change how a business approaches borrowing. By testing different loan amounts and tenures before applying, business owners can choose a repayment structure that suits their cash flow rather than adjusting their finances after the loan has already been disbursed.

For businesses looking for a financing option with simple eligibility criteria and minimal paperwork, they can choose the Bajaj Finance Business Loan and benefit from flexible repayment tenures, an easy online application process and no collateral requirement. You can also use the business Loan EMI calculator available on the Bajaj Finance website to plan your monthly repayments, then check your business loan offer online.

*Terms and conditions apply.