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How is interest calculated on a business loan?

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How to Calculate Interest on a Business Loan?

Fulfil big-ticket investment requirements of your organisation with a high-value Business Loan of up to Rs.45 lakh from Bajaj Finserv. Use a business loan EMI calculator to calculate interest, estimate fixed outflow as instalments and plan your finances accordingly. An estimation of EMIs and interest payable facilitates proper financial planning.

Also known as a business loan interest calculator, the tool allows a borrower to foresee the total interest payable by the tenor’s end. It thus helps compare business loans from different lenders and lets you opt for the most affordable alternative. Individuals can also select a suitable instalment amount that fits their repayment capacity and decide on the loan amount and tenor basis payable EMIs.

Business Loan EMI Calculation Formula:

The basic formula to compute EMI as per applicable interest rate on your business loan is given below. Bajaj Finserv Business Loan EMI calculator uses the same formula to compute instalments.

E = P * r * (1+r) ^n / ((1+r) ^n-1)

• E is EMI
• P is the Principal Loan Amount
• r is the rate of interest calculated on a monthly basis
• n is the tenor/duration of the loan


Here’s an example of how to calculate business loan EMI.
A borrower avails a business loan (P) of Rs.45 lakh whose applicable interest rate (r) is 18%. The loan tenor (n) stands at up to 84 months. Given the above formula, the EMI calculation will be as follows.

E = 30,00,000 x 18%/12 x (1+18%/12) ^4/[(1+18%/12) ^4 – 1)]
E = 88,125

Therefore, the EMI for a business loan of Rs.45 lakh at 18% interest rate for 4 years will be Rs.88,125.

Use the Bajaj Finserv Business Loan EMI Calculator and determine the interest component in your EMIs. The tool is simple to use. All you are required to do is enter the required details to arrive at the results. Enter the following information in the business loan interest calculator.

  • Loan amount, with the maximum capacity of Rs.45 lakh

  • The tenor of the loan in months, say up to 84 months if you opt for a 7-year long tenor

  • Applicable interest rates, which starts at 18% for Bajaj Finserv Business Loan

Once the values are entered, the tool calculates three results, namely –

  • Total interest payable

  • Total payment (Inclusive of Principal and interest)

  • Payable EMI

Use the Bajaj Finserv Business Loan EMI calculator to determine your loan amount and suitable tenor. Consequently, fulfil the minimum eligibility and apply for a Business Loan with Bajaj Finserv to meet diverse funding requirements of your business.

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