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Business Loan EMI Calculator by Reducing Balance
EMI
Reducing Balance
Interest First
Deferred Payment
Balloon Payment
Loan Amount
Loan Tenure
Year
Month
Rate of Interest
%
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Share
EMI
16253
Interest
560273
Principal
1000000
Total
1560273
560 K
(5 Lac)
8
Year
1,000,000
416 K
(4 Lac)
Year
Original
Reduced
𝒊
16253
will be
EMI
for
1000000
(1 m/10 Lac)
Loan Amount
for
8
Year
Loan Tenure
at
12.00%
Rate of Interest
.
How to Reduce Interest/ Tenure?
Pay
0
1
2
3
4
5
Extra EMI every year.
𝒊
Increase EMI by
0
2
3
5
7
10
15
20
% every year.
𝒊
Pay Lump-Sum
0
(10 K)
(20 K)
(30 K)
(40 K)
(50 K)
(60 K)
(70 K)
(80 K)
(90 K)
(100 K)
in
0
1
2
3
4
year.
𝒊
Recalculate
Share
Loan
Tenure
Interest
Original
8 year
560273
Reduced
5 year
10 months
416582
Saved
2 year
2 months
143691
Loan Payment Schedule
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Original
Reduced
Balloon Payment
283 K
(2 Lac)
212 K
(2 Lac)
141 K
(1 Lac)
70 K
0
-
-
-
-
-
2024
2028
2031
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Business Loan EMI by Reducing Balance
A Business Loan EMI by Reducing Balance is a financing option where the EMI is calculated based on the outstanding loan balance after each payment. As you repay the loan, the principal reduces, and interest is charged only on the remaining amount. This results in lower interest payments over time compared to a flat-rate EMI structure. Plan your business growth with our Business Loan EMI Calculator by Reducing Balance. Get detailed insights into your loan repayments, interest rates, and principal, helping you manage your finances for business expansion effectively.
Calculate Business Loan EMI by Reducing Balance
Enter loan details including loan amount, interest rate, tenure, and choose months or years to calculate business loan EMI by reducing balance.
Click Calculate to view your initial business loan EMI breakdown and understand your options.
Customize payment options with three inputs to help you calculate your business loan EMI effectively.
Select a number of extra EMIs per year.
Increase EMIs by a percentage.
Select lump sum payment in a specific year.
Adjust inputs as needed and click Recalculate to update your tenure and interest dynamically for your business loan EMI.
Reducing Balance EMI formula
To calculate Business Loan EMI, use the Reducing Balance EMI formula for precise results. This calculation helps you understand your repayment obligations clearly.
E
M
I
=
P
×
r
×
(
1
+
r
)
n
(
1
+
r
)
n
-
1
EMI
= Equated Monthly Installments
P
= Principal loan amount
r
= Monthly interest rate
n
= Number of monthly installments
Eligibility Criteria for Business Loan EMI by Reducing Balance
Business Registration:
Applicants must have a registered business entity, such as a sole proprietorship, LLC, or corporation.
Creditworthiness:
Lenders assess the creditworthiness of the business and its owners, evaluating credit history, financial statements, and personal credit scores.
Business Viability:
Evidence of the business's viability, including business plans and sales forecasts, may be required to show potential for sufficient revenue to repay the loan.
Collateral:
Depending on the loan amount and terms, lenders may require collateral, such as business assets, to secure the loan. Understanding your business loan EMI by reducing balance and overall business loan EMI is essential for effective financial planning.
Business Loan EMI Calculator by Reducing Balance FAQ
How does Reducing Balance EMI differ from a Flat Rate EMI?
Reducing balance EMI charges interest on the decreasing principal, leading to gradually lower payments and lower total interest. Flat rate EMI charges interest on the full principal throughout the term, resulting in fixed payments and generally higher total interest costs.
What are the advantages of a Business Loan EMI by Reducing Balance?
Business loan EMI by reducing balance lowers overall interest costs compared to flat rate EMIs. As the principal component increases with each payment, the loan balance reduces faster, helping businesses clear debt more quickly and cost-effectively over longer tenures.
What are the disadvantages of a Business Loan EMI by Reducing Balance?
Business loan EMI by reducing balance usually has higher initial payments since interest is first calculated on the full loan amount. Borrowers need to understand how payments reduce over time and how it impacts their overall repayment.
×
How extra EMI(s) help?
At the end of the year, you can pay extra EMIs out of your savings. This extra EMI payment will go towards your Loan Amount and save you on the interest as well as tenure of the loan.
Payment
Tenure
Interest
Current
8 year
560273
1 Extra EMI/ year
8 year
▶ 0 year
494632
▶ 65641
2 Extra EMI/ year
7 year
▶ 1 year
444410
▶ 115863
3 Extra EMI/ year
6 year
▶ 2 year
405459
▶ 154814
How increasing EMI helps?
As your income increases each year, you can get your EMI increased from the bank. This allows you to allocate more funds towards paying off the loan amount and save you on the interest as well as tenure of the loan.
Payment
Tenure
Interest
Current
8 year
560273
Increase EMI by 1%
8 year
▶ 0 year
540957
▶ 19316
Increase EMI by 3%
8 year
▶ 0 year
508849
▶ 51424
Increase EMI by 5%
7 year
▶ 1 year
482986
▶ 77287
How Paying Lumpsum Amount helps?
If you receive unexpected income, such as a bonus or tax refund, consider making a lump-sum payment on your loan. This can help reduce the outstanding loan amount and save you on the interest as well as tenure of the loan.
Payment
Tenure
Interest
Current
8 year
560273
Pay 10% in 2nd year
8 year
▶ 0 year
466509
▶ 93764
Pay 20% in 3rd year
7 year
▶ 1 year
430735
▶ 129538
Pay 30% in 4th year
6 year
▶ 2 year
434771
▶ 125502
How to Reduce Interest/ Tenure?
Making early payments towards Principal amount can reduce your Interest and/ or Tenure.
1. How extra EMI(s) help?
At the end of the year, you can pay extra EMIs out of your savings. This extra EMI payment will go towards your Loan Amount and save you on the interest as well as tenure of the loan.
2. How increasing EMI helps?
As your income increases each year, you can get your EMI increased from the bank. This allows you to allocate more funds towards paying off the loan amount and save you on the interest as well as tenure of the loan.
3. How Paying Lumpsum Amount helps?
If you receive unexpected income, such as a bonus or tax refund, consider making a lump-sum payment on your loan. This can help reduce the outstanding loan amount and save you on the interest as well as tenure of the loan.
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