Calculate the monthly EMI, total interest and total outgo on an MSME term loan, with the outstanding balance at the end of each year.
Enter the sanctioned term loan amount, the annual interest rate on a reducing-balance basis as shown in your sanction letter or Key Fact Statement, and the tenure in years. Put every charge you pay at the start in the upfront charges box: the processing fee plus 18% GST, the first-year CGTMSE guarantee fee if the lender passes it on, documentation and inspection charges, and stamp duty on the loan agreement and hypothecation deed.
Formula. EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P is the loan amount, r is the annual rate ÷ 12 ÷ 100 and n is the number of monthly instalments. This is the reducing-balance method Indian banks and NBFCs use for term loans.
Worked example (illustrative). ₹25 lakh at 11% for 5 years (60 EMIs) gives an EMI of about ₹54,356. Over 60 months you pay about ₹32,61,363, of which about ₹7,61,363 is interest. With ₹29,500 of upfront charges (a 1% fee of ₹25,000 plus ₹4,500 GST), total outgo is about ₹32,90,863. In year 1 about ₹2,55,386 of your EMIs is interest and the balance falls to about ₹21,03,113.
Limits. If the lender quotes a flat rate, do not enter it here: convert it first (a 12% flat rate over 3 years is roughly 21% on a reducing basis). Floating rates are reset when the benchmark moves, so the EMI or tenure will change. Cash credit and overdraft limits have no EMI; see the cash credit interest guide. For the method, read the business loan calculation guide.
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