Business Loan EMI Calculator
Calculate monthly EMI on MSME/SME/startup business loans. Rates typically range 11–24% unsecured, 9–15% secured with property collateral. This tool also estimates your Section 37 tax savings on the interest component.
Business Loan Rates by Lender (2026)
| Lender | Rate | Max Amount | Max Tenure |
|---|---|---|---|
| SBI (SME) | 10.65% – 15.15% | ₹5 Cr | 7 years |
| HDFC Bank | 11.90% – 21.35% | ₹75 Lakh | 5 years |
| ICICI Bank | 12.50% – 18.00% | ₹2 Cr | 7 years |
| Axis Bank | 14.00% – 18.50% | ₹50 Lakh | 5 years |
| Bajaj Finserv | 16.00% – 25.00% | ₹80 Lakh | 8 years |
| Lendingkart | 16.00% – 24.00% | ₹2 Cr | 3 years |
| Mudra Shishu/Kishore/Tarun | up to 9.50% | ₹10 Lakh | 5 years |
| CGTMSE-backed | 8.50% – 12.00% | ₹2 Cr | 10 years |
Types of Business Loans
- Term loan: Fixed-tenure installment loan for capex (machinery, expansion, fit-out)
- Working capital loan: Revolving credit for day-to-day operations, typically 1-year renewable
- Equipment loan: For specific equipment/machinery purchase; equipment itself is the collateral
- Mudra loan: Government scheme for micro-enterprises under ₹10 lakh (Shishu, Kishore, Tarun categories)
- CGTMSE-covered loan: Credit Guarantee Scheme covers collateral-free MSME loans up to ₹2 Cr
- Loan against property (LAP): Secured by commercial/residential property; cheapest but slowest to process
Section 37 Tax Advantage
Unlike personal loan interest, business loan interest is fully tax-deductible as a business expense under Section 37 of the Income Tax Act. On a ₹20 lakh, 5-year, 15% loan, total interest of ₹8.55 lakh reduces your taxable business income dollar-for-dollar — saving approximately ₹2.56 lakh in tax (at 30% effective rate). This effectively reduces your true borrowing cost to roughly 10.5%.
How to Improve Your Approval Odds
- CIBIL score above 750 (both personal and business CIBIL)
- 3 years of ITR filings showing consistent or growing revenue
- 12-18 months clean bank statements without frequent overdrafts or bounces
- Profitable P&L in at least the last fiscal year
- GST compliance with consistent filings and no major defaults
- Business vintage ≥ 3 years preferred by traditional banks (NBFCs accept 1 year)
Frequently Asked Questions
What are business loan interest rates?
Unsecured: 11–24%. Secured (LAP): 9–15%. Mudra: up to 9.5%. CGTMSE-covered: 8.5–12%.
Is business loan interest tax-deductible?
Yes, under Section 37 as business expense. Principal repayment is NOT deductible (it's not an expense). Keep proper documentation linking loan use to business operations.
Can startups get business loans?
Yes, via NBFCs, fintechs (Lendingkart, Indifi), or DPIIT-recognized startup schemes. Traditional banks prefer 3+ year vintage and profitable financials.
What is CGTMSE?
Credit Guarantee Fund Trust for Micro and Small Enterprises — government scheme that covers collateral-free business loans up to ₹2 crore. Covered loans have lower interest rates (8.5–12%).