Set up for business lending — typical rates of 14% to 28% a year and tenures of one to five years. Adjust to whatever you have been quoted.
₹72,138
per month · 48 months
- Total interest
- ₹9,62,605
- Total repayment
- ₹34,62,605
In the first year, about 44.9% of what you pay goes to interest rather than reducing the loan.
Check what I could raiseIndicative only. Final eligibility, interest rate, charges and sanction are decided by the lender after full assessment of your profile and documents. Transakt does not lend and does not approve loans.
What a business loan EMI should look like against your turnover
A useful sanity check that lenders apply informally: total loan instalments should generally sit under about 5% of monthly turnover for a business with normal margins. A business turning over ₹1 crore a year — roughly ₹8.3 lakh a month — is usually comfortable up to around ₹40,000 a month of total EMI, and starts to look stretched well beyond that.
That is a rule of thumb, not a rule. A business with 40% margins carries far more than one running on 6%. But if your proposed EMI is dramatically outside it, expect questions.
Business loan tenures are short, and that is the point
Unsecured business loans usually run one to five years, not fifteen. Lenders are pricing the risk of lending without security, and a shorter tenure limits how long they are exposed. The consequence for you is a high monthly instalment relative to the amount borrowed — ₹30 lakh over four years at 17% is about ₹86,600 a month.
If that number does not work for your cash flow, the answer is usually not a longer unsecured tenure — it is a secured facility. The same ₹30 lakh against property, over fifteen years at 11%, is about ₹34,100 a month. The full comparison is here.
What else to budget for
- Processing fee: commonly 1% to 3%, sometimes up to 5%, usually deducted from disbursement.
- Prepayment or foreclosure charge: often 2% to 5% of the outstanding, and frequently not permitted at all for the first six to twelve months.
- Penal interest on late payment, which can be steep. Set up an auto-debit.
- Stamp duty on the loan agreement, which varies by state.
Now check what you could actually raise
What interest rate should I assume?
For an established, GST-compliant business with a clean record, somewhere between 15% and 20% is a realistic starting assumption for unsecured lending. Below 14% generally means security is involved. Above 24% usually means the profile is thin — young business, no GST, or a credit issue.
Can I get a longer tenure to reduce the EMI?
On unsecured lending, rarely beyond five years. If the EMI at five years does not work, the honest answer is that the amount is too large for unsecured borrowing and a secured route is what you should be looking at.
Is a business loan EMI tax deductible?
The interest portion is generally an allowable business expense; the principal repayment is not. Your CA should confirm this for your specific situation — we are not tax advisers.