Loading...
Calculate business loan EMI, check eligibility score, analyze tax benefits & ROI. Compare 6 lender types, calculate DSCR & LTV ratio for smart business financing decisions.
Annual Profit: $3,600,000
Rating: Good
Fee Amount: $100,000
Interest-only payments during moratorium
Excellent
A business loan calculator is a comprehensive financial tool that helps entrepreneurs and business owners calculate loan EMI, assess eligibility, analyze tax benefits, and compare different lenders. It provides instant calculations for DSCR (Debt Service Coverage Ratio), LTV (Loan to Value) ratio, and ROI analysis to make informed financing decisions.
Our advanced calculator offers 8 powerful tabs: Calculator, Advanced, Eligibility, Tax Benefits, ROI Analysis, Breakdown, Schedule, and Comparison. Whether you're a startup seeking working capital or an established business planning expansion, this tool helps you understand the complete financial picture.
EMI = P × r × (1 + r)^n / ((1 + r)^n - 1)
Where:
Example Calculation:
Loan Amount: ₹50,00,000
Interest Rate: 12% per annum
Tenure: 5 years (60 months)
Monthly Rate: 12/12/100 = 0.01
Monthly EMI: ₹1,11,122
Total Payment: ₹66,67,320 | Interest: ₹16,67,320
Higher loan amount = Higher EMI
₹25L @ 12% = ₹55,561 EMI
₹50L @ 12% = ₹1,11,122 EMI
Higher rate = Higher EMI
₹50L @ 10% = ₹1,06,238 EMI
₹50L @ 15% = ₹1,18,679 EMI
Longer tenure = Lower EMI
₹50L @ 12% for 3Y = ₹1,66,143 EMI
₹50L @ 12% for 7Y = ₹84,386 EMI
Upfront cost (1-3% of loan)
₹50L loan @ 2% fee = ₹1,00,000
Added to total cost
DSCR measures your business's ability to repay the loan from its operating income. It's the most important metric lenders use to assess loan eligibility.
DSCR = Annual Profit / (Annual Loan Payment + Existing Debt)
Minimum Required: 1.25x | Excellent: 1.5x+
Example:
Annual Business Profit: ₹20,00,000
Annual Loan Payment: ₹13,33,464
Existing Debt Payment: ₹2,00,000
DSCR = 20,00,000 / 15,33,464 = 1.30x ✓
This meets the minimum requirement of 1.25x
Insufficient income to cover loan payments. Loan likely to be rejected.
Acceptable but tight. May need additional collateral or guarantor.
Excellent! Strong repayment capacity. Better interest rates possible.
LTV ratio represents the percentage of collateral value that the lender is willing to finance. Lower LTV means lower risk for the lender.
LTV Ratio = (Loan Amount / Collateral Value) × 100
Preferred: ≤70% | Maximum: 90%
Example:
Loan Amount Required: ₹70,00,000
Collateral Value (Property): ₹1,00,00,000
LTV = (70,00,000 / 1,00,00,000) × 100 = 70% ✓
This is within the preferred range
Our calculator uses a comprehensive 100-point scoring system to assess your business loan eligibility. Higher scores improve approval chances and may get you better interest rates.
DSCR Score
Debt service coverage ratio
Credit Score
Personal/business credit rating
Business Age
Years in operation
Collateral/LTV
Loan to value ratio
GST Registration
Tax compliance status
Loan Amount: ₹10L - ₹50L | Interest: 14-18% | Tenure: 3-5 years
Requirements: Business plan, 6+ months operation, credit score 650+, MUDRA/Startup India schemes
Loan Amount: ₹50L - ₹2Cr | Interest: 11-15% | Tenure: 5-7 years
Requirements: 2+ years ITR, GST registration, credit score 700+, MSME registration beneficial
Loan Amount: ₹2Cr+ | Interest: 9-13% | Tenure: 7-10 years
Requirements: 3+ years audited financials, strong DSCR, collateral, credit score 750+
Business loan interest is 100% tax deductible under Section 36(1)(iii) of the Income Tax Act. This significantly reduces your effective interest rate and overall loan cost.
Effective Interest Rate = Nominal Rate × (1 - Tax Rate)
Tax Savings = Annual Interest × Tax Rate
Example:
Loan Amount: ₹50,00,000
Interest Rate: 12% per annum
Annual Interest (Year 1): ₹5,88,000
Corporate Tax Rate: 30%
Annual Tax Savings: ₹1,76,400
Effective Interest Rate: 8.4%
Tax savings are highest in early years when interest component is larger, and gradually decrease as principal repayment increases.
5-Year Loan Tax Savings Example (₹50L @ 12%, 30% tax):
Different lenders offer varying interest rates, eligibility criteria, and loan terms. Our calculator compares all 6 major lender types to help you find the best option for your business.
Traditional banks like SBI, HDFC, ICICI offering competitive rates with strict eligibility.
Non-banking financial companies like Bajaj Finserv, Tata Capital with flexible terms.
Government-backed schemes like PMEGP, Stand-Up India with subsidized interest rates.
Private sector banks like Axis, Kotak, Yes Bank with modern digital processes.
Micro-finance loans up to ₹10 lakhs for small businesses and startups.
Loans for MSME-registered businesses with special benefits and lower rates.
Business loan EMI is calculated using the formula: EMI = P × r × (1 + r)^n / ((1 + r)^n - 1), where P is principal amount, r is monthly interest rate, and n is number of months. For example, a ₹50 lakh loan at 12% for 5 years results in EMI of ₹1,11,122.
DSCR (Debt Service Coverage Ratio) measures your ability to repay the loan. It's calculated as: DSCR = Annual Profit / Annual Loan Payment. Lenders typically require minimum DSCR of 1.25x, meaning your profit should be 25% more than loan payments. A DSCR of 1.5x or higher is considered excellent.
Most lenders require a minimum credit score of 650-700 for business loans. However, government schemes like MUDRA loans may accept lower scores (600+). A credit score above 750 significantly improves your chances and may get you better interest rates.
Yes! Business loan interest is 100% tax deductible under Section 36(1)(iii) of Income Tax Act. If you pay ₹6 lakh annual interest and your tax rate is 30%, you save ₹1.8 lakh in taxes, making your effective interest rate 8.4% instead of 12%.
LTV (Loan to Value) ratio is the percentage of collateral value that lenders will finance. Formula: LTV = (Loan Amount / Collateral Value) × 100. Most lenders prefer LTV ≤70%. For example, if your collateral is worth ₹1 crore, you can typically get a loan up to ₹70 lakhs.
Banks offer lower interest rates (10-13%) but have stricter eligibility criteria and longer processing times. NBFCs charge higher rates (14-18%) but have flexible eligibility, faster approval, and easier documentation. Choose based on your urgency and eligibility.
MUDRA (Micro Units Development & Refinance Agency) loans are government-backed loans for small businesses up to ₹10 lakhs at 10-12% interest. Eligible businesses include startups, MSMEs, and self-employed individuals. No collateral required for loans under ₹10 lakhs.
Typically, lenders offer 1-3x of your annual revenue. For example, if your annual revenue is ₹50 lakhs, you may qualify for ₹50 lakhs to ₹1.5 crore loan. The exact amount depends on profitability, credit score, collateral, and DSCR ratio.
Yes! Startups can get loans through MUDRA scheme, Startup India program, or NBFCs. Requirements: Business plan, 1+ year operation (some schemes accept 6 months), GST registration, and credit score 650+. Loan amounts typically range from ₹10 lakhs to ₹50 lakhs for startups.
Required documents: Business registration certificate, GST registration, 2-3 years ITR, bank statements (6-12 months), financial statements (P&L, balance sheet), business address proof, KYC documents, and collateral documents if applicable.
Prepayment reduces total interest and loan tenure. For example, prepaying ₹5 lakhs annually on a ₹50 lakh loan can save ₹8-10 lakhs in interest and reduce tenure by 2-3 years. Some lenders charge 2-4% prepayment penalty, so check terms before prepaying.
Yes! Our business loan calculator is completely free to use with unlimited calculations. Get instant EMI calculation, eligibility check, tax benefit analysis, ROI calculation, and lender comparison. This is a calculation tool only - actual loan terms and approval depend on your chosen lender.
This business loan calculator is developed by financial technology experts at CalcFinex. Our calculations are based on standard EMI formulas used by banks and financial institutions across India, following RBI guidelines.
Last Updated: January 20, 2025 | Reviewed By: CalcFinex Financial Team
Disclaimer: This calculator provides estimates for informational purposes only. Actual loan terms, interest rates, and eligibility depend on your lender's policies, your credit profile, and current market conditions. Always consult with financial advisors and lenders before making loan decisions.