Loan vs. Own Funds Capital Allocation Calculator
Comprehensive financial decision engine comparing the cost of debt financing against the opportunity cost of deploying your own cash reserves.
D BIZ Loan vs. Own Funds Calculator
Should you pay upfront with your cash reserves or take a loan and invest your funds? Compare interest costs, compounding investment gains, tax savings, and download complete reports.
Financial InputsAsset & Financing Terms
Your alternative investment (11.5% p.a.) earns ₹8,68,024, which exceeds the net loan interest cost (₹2,94,602)!
Year-by-Year Amortization vs. Investment Growth Schedule
Tracks the reducing balance of your loan alongside the compounding growth of your retained capital.
Net Cost of Debt vs Opportunity Return
As of September 30, 2026, corporate interest expenditure on business borrowing is tax-deductible under Section 36(1)(iii), offering a 25.17% to 34.94% tax shield. Personal car or consumer loans do not qualify for interest deductions.
If the return generated by keeping your cash invested in the business or market exceeds the post-tax cost of debt, taking a loan increases total net enterprise wealth.
How to Use the Loan vs. Own Funds Capital Allocation Calculator
Enter Capital Expenditure Amount
Specify the purchase price of the asset, machinery, vehicle, or commercial property.
Enter Loan Terms
Input down payment, interest rate, tenure, and applicable corporate/income tax rate.
Specify Expected Investment Return
Input the expected annual percentage return if you retain your own funds in the business or financial markets.
Examine Recommendation
The engine highlights whether Loan or Own Funds leaves you wealthier, with exact rupee advantages.
Key Highlights & Capabilities
Frequently Asked Questions (FAQs)
When is taking a loan better than paying from own funds?
Taking a loan is financially superior when the post-tax cost of the loan interest is lower than the return you can safely earn by investing that cash elsewhere, or when preserving liquidity is essential for business working capital.
How does the tax shield on business loan interest work?
For registered businesses, interest paid on loans taken for commercial purposes is treated as an allowable business expenditure, reducing taxable profits and saving corporate tax.
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