₹5 crore Business Loan EMI for 5 Years
A ₹5 crore business loan over 5 years at 15% interest (typical for unsecured MSME loans) produces a monthly EMI of roughly ₹11.9 lakh. Business loan interest is fully tax-deductible under Section 37, reducing your effective post-tax cost to about 10–11%. For collateral-backed loans (LAP), you could secure rates as low as 10–12% — a significant saving over 5 years.
Rate Comparison for ₹5 crore / 5 Years
| Rate | Monthly EMI | Total Interest | Total Payment |
|---|---|---|---|
| 8% | ₹10,13,820 | ₹1,08,29,183 | ₹6,08,29,183 |
| 10% | ₹10,62,352 | ₹1,37,41,134 | ₹6,37,41,134 |
| 12% | ₹11,12,222 | ₹1,67,33,343 | ₹6,67,33,343 |
| 15% | ₹11,89,497 | ₹2,13,69,790 | ₹7,13,69,790 |
About This Scenario
A ₹5 crore business loan over 5 years at 15% interest (typical for unsecured MSME loans) produces a monthly EMI of roughly ₹11.9 lakh. Business loan interest is fully tax-deductible under Section 37, reducing your effective post-tax cost to about 10–11%. For collateral-backed loans (LAP), you could secure rates as low as 10–12% — a significant saving over 5 years.
Frequently Asked Questions
What is the maturity of ₹5 crore monthly RD for 5 years?
At 7% quarterly-compounded, a ₹5 crore monthly RD for 5 years matures at ₹11.9 lakh. Of this, ₹2.14 crore is interest earned.
Is RD interest taxable?
Yes. Treated exactly like FD interest — taxable under 'Income from Other Sources' at your slab rate. TDS applies if annual interest from the bank exceeds ₹40,000 (₹50,000 for senior citizens).
RD vs SIP — which is better?
RD gives guaranteed but lower returns (6–7.5%) with sovereign-level safety. SIP in equity mutual funds targets 11–14% historically with market risk. For 5+ year horizons, SIP typically creates 2–3x more wealth.
Can I skip an RD instalment?
Most banks allow 2–4 missed instalments without penalty, but later missed instalments can lead to account closure. Set up auto-debit to avoid the issue.