Free tool
Loan takeover calculator: term loan, CC/OD and business loan
Secured EMI loan for machinery, vehicles, premises or a project. The numbers below are examples: replace them with yours.
Term loan: net saving over the remaining tenure
₹1.05 lakh
- EMI now
- ₹66,733
- EMI after takeover
- ₹64,482
- Interest saved
- ₹1.35 lakh
- One-time costs of switching
- ₹30,000
The switch pays for itself in about 14 months, then saves about ₹2,252 a month.
For education only. Calculations run in your browser; nothing you enter is sent or stored. Results are indicative: lenders apply their own policies, and this is not an offer of credit or advice. Disclaimer
How this works
Term loan and business loan: the calculator works out the EMI on your outstanding amount for the remaining tenure at both rates (standard reducing-balance formula). Interest saved, minus the one-time costs of switching, is your net saving. Unsecured business loans often carry foreclosure charges, so check your agreement.
CC / OD: there is no EMI. Interest is charged on the amount you actually use, so the saving is the rate difference on your average utilisation over the period you choose (limits are usually renewed every year). Processing fees are usually charged on the sanctioned limit.
Break-even is the number of months of lower interest needed to recover the switching costs.
Source for pre-payment charges: Reserve Bank of India, (Pre-payment Charges on Loans) Directions, 2025, 2 July 2025.
It assumes the tenure stays the same and the rate stays fixed. Most business loans are on floating rates that move with a benchmark, so treat the result as a comparison at today's rates, not a forecast.
Before switching, compare the full terms, not just the rate: the reset frequency, security and collateral the new lender asks for, and any foreclosure or prepayment terms in your current loan agreement. A takeover is a fresh appraisal: the new lender will assess your business as if you were applying for the first time.
Go deeper: how lenders assess a business before taking over a loan.
Common questions
What is a loan takeover?
A new lender pays off your existing loan or limit and gives you a fresh facility, usually at a lower rate or on better terms. It is also called a balance transfer. The new lender appraises your business as if you were applying for the first time.
Can a cash credit or overdraft limit be taken over?
Yes. The new lender sanctions a fresh CC/OD limit, with its own drawing power and margins, and the old limit is closed. Because there is no EMI, the saving depends on how much of the limit you actually use, which is how the CC/OD option in this calculator works.
Will my current bank charge a foreclosure or prepayment fee?
It depends on the loan. Under the RBI's Pre-payment Charges on Loans Directions, 2025, for floating-rate business loans to individuals and micro and small enterprises sanctioned or renewed on or after 1 January 2026, commercial banks (other than small finance banks, regional rural banks and local area banks) may not levy any pre-payment charge. Small finance banks, regional rural banks and some co-operative banks and NBFCs may not levy it on such loans up to ₹50 lakh.
For a CC/OD, no pre-payment charge applies if you tell the lender, within the notice period in your agreement, that you will not renew the facility, and it closes on the due date. Fixed-rate loans and other cases follow the lender's policy, which must be disclosed in your sanction letter and loan agreement.
When is a loan takeover worth it?
When the net saving after all switching costs is clearly positive and the break-even month comes well before the end of the loan. Compare the full terms too: collateral, reset frequency, charges and service. Asking your current lender for a rate revision first often costs nothing.