Term Loan EMI Calculator

What is a term loan?

A term loan is money you borrow for a fixed period — the tenure — and repay in equal monthly instalments called EMIs. Banks and NBFCs in India offer term loans to businesses for machinery, expansion or working capital, and to individuals as personal loans. The interest rate, tenure and any processing fee are written in the sanction letter, so you can work out the full cost before you sign.

Each EMI pays two things: interest on the balance you still owe, and a part of the principal. Early in the loan most of the EMI goes towards interest; towards the end almost all of it reduces the principal. The repayment schedule on this page shows that split for every month and every year.

How to use this calculator

• Enter the loan amount the Indian way — 10,00,000, 10 L or 1.2 Cr all work.
• Enter the interest rate quoted by the lender and choose whether it is per year or per month.
• Enter the tenure in years or months. Half-years such as 2.5 years are fine.
• Choose reducing balance (most bank loans) or flat rate (common for some NBFC, vehicle and consumer loans).
• Open Advanced options to add a processing fee with GST, a moratorium, or a different first EMI month.

The result updates as you type. Use Copy link to share exactly these numbers, Download CSV to open the schedule in Excel or Google Sheets, or Print / Save as PDF for a paper copy.

How the EMI is calculated

For a reducing-balance loan, banks use the standard EMI formula:

EMI = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)

Here P is the loan amount, r is the monthly interest rate (the annual rate ÷ 12 ÷ 100) and n is the number of monthly instalments.

Worked example: ₹10,00,000 at 10% a year for 5 years. The monthly rate is 10 ÷ 12 ÷ 100 = 0.008333 and n = 60, which gives an EMI of ₹21,247.04. In the first month the interest is ₹8,333.33, so ₹12,913.71 of the EMI reduces the loan. Over 60 months you pay ₹12,74,822.84 in total, of which ₹2,74,822.84 is interest.

This calculator works in paise and rounds each month’s interest to the nearest paisa. The last EMI is adjusted by a few paise so that the loan closes at exactly zero.

Flat rate vs reducing balance

With a reducing balance, interest is charged only on the amount you still owe, so the interest part of each EMI falls every month. With a flat rate, interest is charged on the full original amount for the whole tenure, even though you are paying the loan back.

The difference is large. ₹10,00,000 at a 10% flat rate for 5 years costs ₹5,00,000 in interest (10% × 5 years), which means an EMI of ₹25,000. The same EMI on a reducing balance corresponds to about 17.27% a year — this calculator shows it as the equivalent reducing rate. Going the other way, a 10% reducing-balance loan is equivalent to a flat rate of only about 5.5%.

So when a lender quotes a flat rate, compare the equivalent reducing rate, not the headline number.

Loans with a moratorium

A moratorium is a period at the start of the loan — often 3 to 12 months for business loans — when you do not pay the full EMI. In this calculator the tenure includes the moratorium, so a 5-year loan with a 6-month moratorium is repaid over the remaining 54 months.

There are two common types. If interest is added to the loan, you pay nothing during the moratorium but the balance grows: on ₹10,00,000 at 10%, a 6-month moratorium raises the EMI to ₹24,250.33 and the total interest to ₹3,09,517.85. If you pay the interest each month instead, you pay ₹8,333.33 a month during the moratorium, the EMI afterwards is ₹23,072.41 and the total interest is ₹2,95,909.94.

A moratorium eases cash flow at the start, but it always costs more interest than repaying from the first month.

Processing fee, GST and the true cost

Most lenders charge a processing fee, usually between 0.5% and 2% of the loan, and GST at 18% is added to that fee. On ₹10,00,000, a 1% fee is ₹10,000 plus ₹1,800 GST. The fee is often deducted from the amount paid out, so you receive less than the loan amount but repay EMIs on the full amount.

That is why the calculator also shows an effective annual rate including fees. For ₹10,00,000 at 10% over 5 years with a 1% fee, the effective rate becomes about 10.51% once the fee and GST are counted. Use this figure, together with the total cost of the loan, to compare offers from different lenders.

Common mistakes to avoid

• Comparing a flat rate with a reducing rate as if they were the same.
• Looking only at the EMI: a longer tenure lowers the EMI but raises the total interest.
• Ignoring the processing fee and GST, which add to the real cost of the loan.
• Forgetting that interest during a moratorium may be added to the loan.
• Expecting a match with the bank to the last rupee: lenders may round at different steps, count interest by days instead of months, or charge broken-period interest for the first month.

Results are estimates for planning. Always check the final figures in your sanction letter. This calculator does not yet handle part-prepayments or rate changes during the loan.