Reviewed & updated by WordNExcel Team — Updated October 31, 2026
A loan proposal template helps you present a clear, well-organised request to a bank or lender, showing how much you want to borrow, what the money is for and how you will repay it. On this page you can use the free loan EMI calculator above to work out the monthly payment, total interest and total cost of a loan, then download three free loan proposal templates in Excel: a loan proposal summary, a loan repayment schedule (EMI table) and a loan offer comparison.
Each file is a real, editable .xlsx spreadsheet created for this page. The monthly payment is calculated with Excel’s PMT function, the repayment schedule splits every payment into interest and principal, and the comparison sheet shows which offer has the lowest total cost. The templates open in Excel, Google Sheets and LibreOffice Calc and print neatly to attach to your application.
Loan EMI Calculator
Runs in your browser; nothing is sent or saved. Uses a fixed rate and equal monthly payments; your lender’s figures may differ.
Free download: 3 templates (.xlsx). Works in Excel and Google Sheets. No sign-up needed.
What Is a Loan Proposal?
A loan proposal is a document a business or individual prepares to ask a lender for a loan. It explains who is borrowing, how much they need, what the money will be used for, how and when it will be repaid and what security or collateral is offered. A strong proposal answers the lender’s main questions before they are asked, which can make the application faster and improve the chances of approval.
Lenders usually want to see three things: that the purpose of the loan makes sense, that the borrower can afford the repayments, and that there is a plan if things go wrong. The templates on this page are built around those three questions.
How to Use the Loan EMI Calculator
Enter the loan amount, the annual interest rate, the term in years and any upfront fees. The calculator shows the monthly payment, often called the EMI (equated monthly instalment), the total amount repaid, the total interest and the total cost including fees.
With the example figures, a loan of 50,000 at 9% over 5 years has a monthly payment of 1,037.92. Over 60 payments you repay 62,275.07, of which 12,275.07 is interest. Try a shorter term or a lower rate to see how much interest you could save. The calculator assumes a fixed rate and equal monthly payments, and it runs entirely in your browser.
Download the Free Loan Proposal Templates
The three Excel files below cover the proposal itself, the repayment plan and the choice between lenders.
Loan Proposal Summary
The summary sheet sets out the loan request (amount, interest rate, term and payments per year) and calculates the payment per period, total repaid and total interest. Next to it, a use-of-funds table lists how the money will be spent and checks that it adds up to the loan amount. A repayment capacity section compares your average monthly net cash flow and existing loan payments with the new payment, and works out the cash left over and a simple debt service coverage ratio. There is also a line for the collateral or security you are offering.
Loan Repayment Schedule (EMI Table)
The repayment schedule lists every monthly payment for up to 60 months, showing the opening balance, payment, interest, principal and closing balance. Enter the loan amount, rate and term at the top, and the table shows exactly how the balance falls to zero. Lenders and business owners use this to plan cash flow and to see how much interest is paid each year.
Loan Offer Comparison
When you receive several offers, the comparison sheet puts them side by side. Enter the lender, amount, rate, term and upfront fees for up to three offers, and the sheet calculates the monthly payment, total repaid, total interest and total cost including fees. It also names the offer with the lowest total cost. The lowest monthly payment is not always the cheapest loan, and this sheet makes that easy to see.
What to Include in a Loan Proposal
- Borrower details: business name, structure, address, years in business and the owners or directors.
- Loan request: amount, preferred term and type of loan.
- Purpose: exactly what the money will be spent on, with a use-of-funds table.
- Business overview: what the business does, its customers and its market.
- Financial information: recent profit and loss statements, balance sheets and tax returns, as the lender requires.
- Cash flow projection: expected cash in and out, showing the repayments can be met.
- Repayment plan: the monthly payment and how it fits within your cash flow.
- Collateral or security: assets offered to secure the loan, and any personal guarantees.
- Supporting documents: quotes for equipment, contracts with customers or a business plan.
How to Write a Strong Loan Proposal
- Know how much you need. Base the amount on quotes and real costs, not a round number. The use-of-funds table should add up exactly to the loan amount.
- Explain the purpose clearly. Lenders prefer loans that create value, such as equipment that increases production or stock for confirmed orders.
- Show you can repay. Use the repayment capacity section to show the payment is comfortably covered by your cash flow.
- Be realistic. Use conservative sales forecasts and include all existing debts.
- Offer security where you can. Collateral or guarantees reduce the lender’s risk.
- Keep it short and organised. Put a one-page summary at the front and detailed figures in attachments.
- Check every number. Make sure figures match across the proposal, the financial statements and the projections.
Understanding EMI and Interest
An EMI loan is repaid in equal monthly payments. Each payment includes interest on the balance still owed and a share of the principal. At the start of the loan, most of each payment goes to interest because the balance is high. As the balance falls, more of each payment goes to the principal. You can see this pattern clearly in the repayment schedule.
The total interest you pay depends on three things: the amount borrowed, the interest rate and the term. A longer term lowers the monthly payment but increases the total interest. Making extra payments, where the lender allows it without penalty, reduces the balance faster and cuts the interest.
Debt Service Coverage Explained
Many lenders look at the debt service coverage ratio, which compares the cash available to make loan payments with the payments themselves. The summary sheet works out a simple version: average monthly net cash flow divided by the total monthly loan payments, including the new loan. A ratio above 1 means your cash flow covers the payments. Lenders usually want some margin above 1, and the exact level they require varies, so ask your lender.
Comparing Loan Offers
When comparing offers, look beyond the interest rate. Check the term, upfront fees, early repayment penalties, whether the rate is fixed or variable, and any security or guarantee required. Use the comparison sheet to compare the total cost of each loan, then weigh that against the other terms. A slightly more expensive loan with no early repayment penalty may suit you better if you expect to pay it off early.
Common Reasons Loan Proposals Are Declined
Lenders often decline proposals for a small number of reasons: the borrower cannot show enough cash flow to cover the repayments, the purpose of the loan is unclear, the figures do not match the financial statements, or there is too little security for the amount requested. Before you submit, review your proposal against each of these points. If the repayment capacity section shows very little cash left after the new payment, consider borrowing less, choosing a longer term or delaying the loan until cash flow improves.
Related Templates
You can also check these important templates like the cash flow projection templates for showing lenders your expected cash in and out, and the profit and loss statement templates for the financial statements most lenders ask for.
You may also like the amortization schedule templates for longer loans and mortgages.
Frequently Asked Questions
What is a loan proposal?
A loan proposal is a document that asks a lender for a loan. It explains how much you want to borrow, what it is for, how you will repay it and what security you offer.
How is the EMI calculated?
The EMI is calculated from the loan amount, the monthly interest rate and the number of payments, using the standard annuity formula. Excel’s PMT function and the calculator above both use it.
What is a good debt service coverage ratio?
A ratio above 1 means your cash flow covers your loan payments. Many lenders want a margin above 1; ask your lender what level they require.
Can I use the templates in Google Sheets?
Yes. Upload the .xlsx files to Google Drive and open them with Google Sheets. The PMT, INDEX and MATCH formulas all work.
Is the lowest monthly payment always the cheapest loan?
No. A longer term lowers the payment but usually increases the total interest. Use the comparison sheet to compare the total cost.
Does the calculator include variable rates?
No. It assumes a fixed rate and equal monthly payments. Ask your lender for figures if the rate can change.
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