What is EMI for a Business Loan?
EMI (Equated Monthly Installment) is the fixed monthly amount you pay to the bank or lender. It includes both:
- Principal Amount (the actual loan you borrowed)
- Interest Amount (the cost of borrowing money)
The formula to calculate EMI is:
EMI = [P × R × (1+R)^N] ÷ [(1+R)^N – 1]
Where:
- P = Loan Amount (15,00,000)
- R = Monthly Interest Rate (Annual Rate ÷ 12 ÷ 100)
- N = Loan Tenure (in months)
EMI Calculation for 15 Lakh Business Loan
Let’s calculate the EMI for a 15 lakh loan with different interest rates and tenures.
Example 1: Loan Tenure – 5 Years (60 Months)
- Loan Amount: ₹15,00,000
- Interest Rate: 12% per annum
- Tenure: 60 months
Monthly EMI = ₹33,367
Total Payment = ₹20,02,020
Interest Paid = ₹5,02,020
Example 2: Loan Tenure – 7 Years (84 Months)
- Loan Amount: ₹15,00,000
- Interest Rate: 12% per annum
- Tenure: 84 months
Monthly EMI = ₹26,588
Total Payment = ₹22,33,392
Interest Paid = ₹7,33,392
Example 3: Loan Tenure – 10 Years (120 Months)
- Loan Amount: ₹15,00,000
- Interest Rate: 12% per annum
- Tenure: 120 months
Monthly EMI = ₹21,502
Total Payment = ₹25,80,240
Interest Paid = ₹10,80,240
Factors That Affect EMI
- Interest Rate – Higher rates increase EMI.
- Loan Tenure – Longer tenure means lower EMI but higher total interest.
- Credit Score – A good score helps you get lower interest.
- Type of Loan – Secured loans usually have lower interest than unsecured loans.
- Lender Policies – Different banks/financial institutions have varying EMI rules.
Tips to Reduce EMI on a 15 Lakh Loan
- Compare multiple lenders before applying.
- Choose a longer tenure if you want smaller EMIs.
- Improve your credit score for lower rates.
- Make part-prepayments whenever possible.
- Negotiate with banks for better terms.
Business Loan EMI Calculator
Instead of manual calculation, you can use a Business Loan EMI Calculator online. Just enter:
- Loan Amount = ₹15,00,000
- Interest Rate = (as per lender)
- Tenure = (in months/years)
It will instantly show you EMI, total interest, and repayment amount.
Final Thoughts
A 15 lakh business loan can be a game-changer for your business growth. But always calculate your EMI before applying to avoid financial stress. Remember:
- Short tenure = Higher EMI but lower total interest.
- Long tenure = Lower EMI but higher total interest.
By planning smartly and comparing lenders, you can choose the right EMI structure for your needs.
FAQs
Q1. What will be the EMI for a 15 lakh loan for 5 years?
At 12% interest, your EMI will be around ₹33,367.
Q2. Which bank gives the lowest EMI on a business loan?
Different banks offer different rates. Compare options like SBI, HDFC, ICICI, and NBFCs before applying.
Q3. Can I reduce my EMI later?
Yes, you can lower EMI by increasing tenure, refinancing the loan, or making part-prepayments.
Q4. Is collateral required for a 15 lakh loan?
It depends on the lender. Some offer unsecured loans, while others may ask for collateral.
Q5. What is the minimum CIBIL score for a business loan?
Most banks prefer a CIBIL score above 700 for approving business loans at good rates.
Disclaimer: This article is for general information only. The interest rates and terms mentioned in it depend on the policies of the bank and NBFC. These may change from time to time. Before taking any type of loan, get complete information from your bank.