Calculate your machinery loan EMI
Year-by-year repayment schedule
| Year | Principal paid | Interest paid | Balance at year end |
|---|
Reducing-balance method. Results are estimates for planning; the lender's Key Fact Statement is final. Insurance, legal and other charges are not included.
Machinery loans usually fund 70% to 90% of the machine's cost, and the tenure is matched to the machine's useful life.
Machinery Loan at a glance
The figures the calculator starts with come from these typical ranges. Change them to match the offer in front of you.
| Feature | What to expect |
|---|---|
| Typical loan amount | Roughly ₹5 lakh to ₹5 crore or more, usually 70% to 90% of machine cost |
| Tenure | Typically 3 to 7 years, matched to the machine's useful life |
| Indicative interest rate | Roughly 9% to 20% a year, depending on lender, borrower profile and machine type |
| Processing fee | Often around 0.5% to 2% of the loan amount plus GST; varies by lender |
| Security / collateral | The machine is hypothecated; additional collateral may be asked for larger amounts |
| Typical time to disbursal | About one to three weeks after the supplier quotation, valuation and inspection |
From our Machinery Loan guide. Ranges are indicative; your offer may differ.
Machinery Loan EMI table at 12%
Monthly EMI for common machinery loan amounts at an example rate of 12% a year, on the reducing-balance method lenders use. Read across a row to see how a longer tenure lowers the EMI, and remember that it raises the total interest: on ₹30 lakh, the interest is ₹7,92,072 over 4 years but ₹14,48,489 over 7 years.
| Loan amount | EMI for 4 years | EMI for 5 years | EMI for 7 years |
|---|---|---|---|
| ₹10 lakh | ₹26,334 | ₹22,244 | ₹17,653 |
| ₹20 lakh | ₹52,668 | ₹44,489 | ₹35,305 |
| ₹30 lakh | ₹79,002 | ₹66,733 | ₹52,958 |
| ₹40 lakh | ₹1,05,335 | ₹88,978 | ₹70,611 |
How the interest rate changes your machinery loan EMI
Your rate depends on your credit score, income, the lender and the loan details. On ₹20 lakh over 5 years, the gap between the lowest and highest indicative rate is ₹6,88,263 in total repayment, which is why it pays to compare offers before you accept one.
| Interest rate | Monthly EMI | Total interest | Extra vs lowest rate |
|---|---|---|---|
| 9% | ₹41,517 | ₹4,91,003 | — |
| 12% | ₹44,489 | ₹6,69,334 | +₹1,78,331 |
| 16% | ₹48,636 | ₹9,18,167 | +₹4,27,164 |
| 20% | ₹52,988 | ₹11,79,266 | +₹6,88,263 |
Down payment: how it changes your machinery loan EMI
The down payment decides how much you borrow. A larger one lowers both the EMI and the total interest, and it protects you from owing more than the machine is worth. For a machine cost of ₹25 lakh at 12% over 5 years:
| Down payment | Loan amount | Monthly EMI | Total interest | Total cost incl. down payment |
|---|---|---|---|---|
| 10% (₹2.5 lakh) | ₹22.5 lakh | ₹50,050 | ₹7,53,000 | ₹32,53,000 |
| 20% (₹5 lakh) | ₹20 lakh | ₹44,489 | ₹6,69,334 | ₹31,69,334 |
| 30% (₹7.5 lakh) | ₹17.5 lakh | ₹38,928 | ₹5,85,667 | ₹30,85,667 |
| 40% (₹10 lakh) | ₹15 lakh | ₹33,367 | ₹5,02,000 | ₹30,02,000 |
The real cost of a machinery loan: fees and APR
The EMI covers interest and principal only. Lenders also charge a processing fee, commonly around 0.5% to 2% of the amount on machinery loans, plus 18% GST, and it is usually deducted from the money you receive. Because you pay the EMI on the full amount but receive less, the annual percentage rate (APR) is higher than the interest rate. For ₹20 lakh at 12% over 5 years:
| Processing fee | Fee incl. GST | Money in hand | APR |
|---|---|---|---|
| 0.5% + GST | ₹11,800 | ₹19,88,200 | 12.26% |
| 1.25% + GST | ₹29,500 | ₹19,70,500 | 12.66% |
| 2% + GST | ₹47,200 | ₹19,52,800 | 13.06% |
Every lender must show the APR and total repayable amount in the Key Fact Statement before you sign. Compare offers on that figure, not on the headline rate. At a 1.25% fee, this loan's APR is about 12.66%.
Can you afford this EMI?
Lenders usually keep all your EMIs together within about 40% to 50% of net monthly income. For an EMI of ₹44,489 with no other loans, that means a take-home income of at least ₹89,000 at the 50% limit, and about ₹1,12,000 to stay within a more comfortable 40%. Existing EMIs, including credit card EMIs, reduce what is left for this one.
Compare the EMI with the extra monthly output or savings the machine will bring. If the machine pays for its own EMI, the loan is working.
Prepay to cut the interest
Paying a lump sum towards the principal reduces the interest for the rest of the loan. On ₹20 lakh at 12% over 5 years, a part-prepayment of ₹2,00,000 after the first year:
- with the EMI kept at ₹44,489, closes the loan about 7 months early and saves roughly ₹1,12,850 of interest;
- with the tenure kept, cuts the EMI to about ₹39,222 and saves roughly ₹52,805 of interest.
Keeping the EMI and shortening the tenure saves more. Floating-rate loans to individuals cannot carry prepayment charges; fixed-rate loans may, so check your agreement first.
How machinery loan EMI is calculated
Lenders use the reducing-balance formula: EMI = P × R × (1 + R)N ÷ ((1 + R)N − 1), where P is the loan amount, R is the yearly rate divided by 12 and by 100, and N is the number of monthly instalments.
For ₹20 lakh at 12% over 60 months, R is 0.01 and the EMI comes to ₹44,489. In the first month, ₹20,000 of it is interest and ₹24,489 repays principal. Each month the balance falls, so the interest part shrinks and the principal part grows. In the first year you pay about ₹2,23,286 in interest, which is 42% of what you pay in that period. The year-by-year schedule in the calculator shows the full split.
Before you apply for a machinery loan
The calculator tells you what the loan costs. Before you apply, check whether you qualify, what documents lenders ask for and the mistakes borrowers most often make.
Related EMI calculators
Planning tools
Machinery Loan EMI: frequently asked questions
What is the EMI for a machinery loan of ₹20,00,000?
At 12% a year for 5 years, the EMI is ₹44,489 and the total interest is ₹6,69,334. Over 4 years the EMI rises to ₹52,668 but the interest falls to ₹5,28,048.
How is machinery loan EMI calculated?
With the reducing-balance formula EMI = P x R x (1+R)^N / ((1+R)^N - 1), where R is the monthly rate and N the number of months. Interest is charged only on the balance still outstanding, so the interest part of each EMI falls over time.
Does the machinery loan EMI include the processing fee?
No. The EMI covers interest and principal. The processing fee, usually around 0.5% to 2% of the amount plus 18% GST, is generally deducted upfront. Use the APR in the Key Fact Statement to compare total cost.
How much down payment do I need for a machinery loan?
Lenders set their own limit. Many ask for at least about 10% of the machine cost. On ₹25,00,000, moving from 10% to 30% down cuts the EMI from ₹50,050 to ₹38,928.
How can I reduce my machinery loan EMI?
Choose a longer tenure, borrow less by paying a bigger down payment, or get a lower rate by improving your credit score or comparing lenders. A longer tenure lowers the EMI but raises the total interest, so pick the shortest tenure you can comfortably afford.
Is the rate in this calculator my actual machinery loan rate?
No. 12% is an example within the indicative range of about 9% to 20%. Your rate depends on the lender, your credit score, income and the loan details. Enter the rate in your own offer for an exact EMI.
Does prepaying a machinery loan save money?
Yes. Here, prepaying ₹2,00,000 after one year saves roughly ₹1,12,850 of interest if you keep the EMI. Floating-rate loans to individuals cannot carry prepayment charges; fixed-rate loans may.
Rates, fees and limits are indicative ranges for India, reviewed on the date above. KhatuLoans is not a lender and does not decide approval or pricing. Read our editorial policy and how we make money.
Official sources and further reading
These guides are written from Reserve Bank of India rules and official scheme pages. Rules, rates and scheme terms change, so check the current position on these sites and in your lender's Key Fact Statement before you apply.
- Udyam Registration Portal. The free government registration for micro, small and medium enterprises, needed for many MSME loan schemes.
- Pradhan Mantri MUDRA Yojana. The government scheme for collateral-free loans to small non-farm businesses.
- CGTMSE. The trust that guarantees collateral-free loans to micro and small enterprises through member lenders.
- RBI: Key Facts Statement (KFS) for loans and advances. The Reserve Bank of India notification that tells lenders to give every borrower a plain-language statement of the full cost of a loan.
- RBI Complaint Management System. Where to take a complaint against a bank, NBFC or other regulated lender if the lender does not resolve it.
- RBI (Pre-payment Charges on Loans) Directions, 2025. Bars pre-payment charges on floating-rate loans taken by individuals for non-business purposes, for loans sanctioned or renewed from 1 January 2026.
- Reserve Bank - Integrated Ombudsman Scheme, 2021. The single complaint scheme for customers of banks, NBFCs and other RBI-regulated lenders.
- RBI: Free Annual Credit Report to Individuals. Credit bureaus must give you one free full credit report with score every calendar year.
- RBI Financial Education. Consumer guidance from the Reserve Bank of India on borrowing, fraud and your rights as a customer.
Edited by Hemant Kumar. Rates on this site are indicative ranges, not offers.