# Business Loan EMI Calculator: Fees, Real Cost, Tax Saved > Business loan EMI calculator: monthly EMI, total interest, processing fee with GST, the effective annual cost and tax saved as interest is deductible. Source: https://trykosh.com/tools/business-loan-emi-calculator Free tool - Business and GST # Business loan EMI calculator with fees and tax saving See the EMI on a business loan and what it really costs you once the processing fee, the GST on that fee and the tax saving on interest are counted. Rules checked 25 October 2026Free - no sign-upRuns in your browser Monthly EMI INR 69,331 36 months at 15% on INR 20 lakh Total interest**INR 4,95,904** Effective annual cost**16.7%** Tax saved on interest + fee**INR 1,67,202** Principal **INR 20,00,000**Interest **INR 4,95,904**Fee + GST **INR 47,200** Loan sanctioned INR 20,00,000 − Processing fee INR 40,000 − 18% GST on the fee INR 7,200 Cash in your account INR 19,52,800 EMIs paid (36 x INR 69,331) INR 24,95,904 Interest + fee (deductible) INR 5,35,904 − Tax saved at 31.2% INR 1,67,202 Cost of the loan after tax INR 3,75,902 Year by year Year Interest Principal Balance Tax saved Year 1 INR 2,61,860 INR 5,70,108 INR 14,29,892 INR 81,700 Year 2 INR 1,70,212 INR 6,61,756 INR 7,68,136 INR 53,106 Year 3 INR 63,832 INR 7,68,136 INR 0 INR 19,916 Interest on a loan used for the business is a deductible expense; the principal repaid is not. If you're GST-registered, the GST on the fee comes back as input tax credit. ## Upload your statement and Kosh does this for you. Upload your bank statements and Kosh separates business from personal spending and keeps your tax and GST dates in view. [Start free](/signup?via=tool-business-loan-emi-calculator) ## How the business loan EMI calculator works The EMI uses the standard reducing-balance formula: each month's interest is charged on the outstanding principal, and the rest of the EMI repays principal. Unsecured business loans to small firms typically run from about 14% to 24% a year, while loans against property or under government-backed schemes cost less. Your rate depends on your vintage, turnover and credit score, so enter the one you're offered. Lenders also take a processing fee upfront, often 1% to 3%, with 18% GST on top, deducted from the amount they disburse. You repay EMIs on the full loan but receive less, so the effective annual cost is higher than the headline rate. The calculator finds the rate that matches the cash you actually get to the EMIs you pay. Interest on a loan taken for business is a deductible expense, as is the processing fee. Choose your tax rate: 31.2% for a firm, LLP or proprietor in the 30% slab, 25.17% for a company in the 22% regime. The tax saved, year by year, lowers the true cost of borrowing. Principal repayments are not deductible. The year-by-year table shows how interest falls as the balance shrinks, which is why the tax saving is largest in the first year. EMI = P x r x (1 + r)^n / ((1 + r)^n − 1) P loan amount r annual rate / 12 / 100 n tenure in months ## Worked example: Imran's textile company in Surat borrows INR 50 lakh Imran's private limited company takes a INR 50 lakh loan for new looms at 13.5% over five years, with a 1.5% processing fee. The EMI is INR 1,15,049. After the INR 75,000 fee and INR 13,500 GST, INR 49,11,500 reaches the account, so the effective cost is about 14.3% a year. Total interest is INR 19,02,954; with the fee, INR 19,77,954 is deductible, saving INR 4,97,811 at the company's 25.17% tax rate. Monthly EMI INR 1,15,049 60 months at 13.5% on INR 50 lakh Total interest**INR 19,02,954** Effective annual cost**14.3%** Tax saved on interest + fee**INR 4,97,811** Principal **INR 50,00,000**Interest **INR 19,02,954**Fee + GST **INR 88,500** Loan sanctioned INR 50,00,000 − Processing fee INR 75,000 − 18% GST on the fee INR 13,500 Cash in your account INR 49,11,500 EMIs paid (60 x INR 1,15,049) INR 69,02,954 Interest + fee (deductible) INR 19,77,954 − Tax saved at 25.17% INR 4,97,811 Cost of the loan after tax INR 14,93,642 Interest on a loan used for the business is a deductible expense; the principal repaid is not. If you're GST-registered, the GST on the fee comes back as input tax credit. [Load this example into the calculator ->](?amount=5000000&rate=13.5&months=60&feePct=1.5&taxRate=25.168#calculator) ## Good to know - If you're GST-registered, claim the 18% GST on the processing fee as input tax credit. It's then not a cost at all. - Interest is deductible only if the money is used for the business. Using a business loan for personal spending makes that part non-deductible. - Ask about foreclosure charges. Many lenders charge 2% to 5% on prepayment of business loans; RBI rules bar foreclosure charges on floating-rate loans to individuals and micro and small enterprises. - Under the presumptive scheme (44AD), you can't claim interest separately: the 6% or 8% deemed profit is taken to cover all expenses. ## Frequently asked questions Is business loan interest tax deductible? Yes. Interest on capital borrowed for business is a deductible expense, and so is the processing fee. The principal repaid is not deductible, since it's a repayment of the loan rather than an expense. What is the EMI on a INR 10 lakh business loan? At 15% for three years, the EMI is about INR 34,665 and total interest about INR 2.48 lakh. At 18% for three years it rises to about INR 36,152. Use the calculator with your offered rate and tenure. Why is the effective rate higher than the quoted interest rate? Because the processing fee and its GST are deducted upfront, you receive less than the loan amount but repay EMIs on all of it. Spreading that fee over the tenure adds roughly 0.5% to 2% a year, more on short tenures. Does a business loan EMI affect my personal credit score? For a proprietorship, yes: the loan is in your name and reports to your personal credit file. For a company or LLP, the loan reports to the entity's commercial credit file, but a personal guarantee you sign can still bring it onto yours. ## Sources and assumptions - [Reserve Bank of India](https://www.rbi.org.in/) - [Income Tax Department](https://www.incometax.gov.in/) Rules and rates last checked on 25 October 2026. Results are estimates for planning and education, not tax, legal or investment advice. Kosh is an educational financial planning tool by Primedepth Labs. It is not a SEBI-registered investment adviser and does not offer personalised investment advice, hold your money or execute trades. Markets carry risk; read scheme documents carefully and consult a registered adviser before acting.