CGTMSE Guarantee Fee Calculator: How to Calculate CGTMSE Charges

Taking a business loan without offering collateral sounds good. But there is a cost attached to this benefit. Banks pay a guarantee fee to CGTMSE for covering the default risk. This cost is passed on to the borrower. The fee amount changes based on your loan size, borrower category and loan type. Most business owners do not know how this fee is worked out. Using a CGTMSE fee calculator before applying helps you know the exact cost. 

This article explains what the CGTMSE guarantee fee is and how it is calculated. It also covers the current rates and factors that affect the final charge. 

What Is the CGTMSE Guarantee Fee Calculator?

A CGTMSE fee calculator is an online tool that helps you find out the guarantee fee payable on your loan. It uses the loan amount and other factors to give you an estimate. The calculator works based on the fee rates set by CGTMSE. You enter the loan amount, and the tool shows the annual fee. 

What Does the CGTMSE Guarantee Fee Mean?

The CGTMSE guarantee fee is the amount paid to the Credit Guarantee Fund Trust for providing guarantee cover to lenders. It works like an insurance premium. The trust takes on the risk of borrower default. In exchange, it charges a fee. This fee ensures the trust has enough funds to pay claims when borrowers default.

The fee is paid by the Member Lending Institution (MLI) to CGTMSE. The MLI usually recovers this amount from the borrower. The CGTMSE guarantee fee is calculated as a percentage of the loan amount. The applicable rate depends on the loan size. 

The CGTMSE fee has a tiered structure. Smaller loans have lower rates. Larger loans have higher rates. This structure makes the scheme affordable for micro enterprises. It also ensures the trust collects enough fees to cover its risks.

How to Use the CGTMSE Guarantee Fee Calculator

Follow these steps to use the CGTMSE Guarantee Fee Calculator 

Step 1: Go to the Official CGTMSE Website

Visit cgtmse.in and navigate to the loan calculator section listed under the eligibility calculator.

Step 2: Select the Borrower Category

Choose your borrower category, such as a woman entrepreneur, SC/ST, a ZED-certified unit, or a general borrower. Eligible categories receive a 10% discount on the standard guarantee fee. 

Step 3: Enter the Loan Amount

Type in the sanctioned loan amount in rupees. The calculator applies the relevant fee slab automatically based on the figure entered.

Step 4: Select the Loan Type

Indicate whether the loan is a term loan or a working capital facility. The CGTMSE fee for term loan may differ from other facility types under certain slabs.

Step 5: View the Calculated Fee

The tool displays the applicable Annual Guarantee Fee, including the GST component. This is the amount the lender will remit to CGTMSE on behalf of the borrower.

CGTMSE Guarantee Fee Calculation Examples

Before looking at examples, here is the formula used for CGTMSE fee calculation:

AGF = Loan Amount × Applicable Rate ÷ 100

Add 18% GST to the calculated AGF to get the total payable amount. 

Example 1: ₹10 Lakh Loan

• Loan amount: ₹10,00,000
• Applicable AGF rate: 0.37%
• AGF = ₹10,00,000 × 0.37 ÷ 100 = ₹3,700
• GST at 18% = ₹666
• Total payable: ₹4,366

Example 2: ₹40 Lakh Loan

• Loan amount: ₹40,00,000
• Applicable AGF rate: 0.55%
• AGF = ₹40,00,000 × 0.55 ÷ 100 = ₹22,000
• GST at 18% = ₹3,960
• Total payable: ₹25,960

Latest CGTMSE Guarantee Fee Rates

The CGTMSE fee rates are revised from time to time. The latest revision came into effect on 1 April 2025. The table below shows the current standard rates. 

The CGTMSE coverage fee is charged on the guaranteed amount in the first year. In subsequent years, it is charged on the outstanding loan amount. Additional charges like GST apply. Certain borrower categories may get discounts.

Factors That Affect Your CGTMSE Guarantee Charges

The following are the main factors that affect the CGTMSE guarantee cover

1. Loan Amount

The AGF rate increases as the loan amount grows. Loans up to ₹10 lakh carry the lowest rate of 0.37%, while loans between ₹2 crore and ₹5 crore attract a rate of 1.35%. The slab structure means that a higher loan amount results in a higher annual fee in absolute terms.

2. Borrower Category

Women entrepreneurs, SC/ST borrowers, and certain other categories receive a 10% reduction in the standard AGF rate. This directly reduces the annual and total costs over the loan tenure.

3. Economic Conditions

Economic conditions can influence CGTMSE fee rates. During periods of economic stress, higher default risk may lead to changes in the fee structure. CGTMSE reviews the rates from time to time based on its policy.

4. Loan Tenure

A longer repayment period means the CGTMSE guarantee fee continues for more years. Even though the annual fee decreases as the outstanding balance drops, longer tenures result in higher cumulative fee payments over time.

5. Government Policy Changes

The government reviews the CGTMSE scheme from time to time. Changes in policy can affect the fee structure. Rate reductions or increases may apply to new loans.

6. Type of Facility

The fee calculation can differ between term loans and working capital facilities under certain conditions. Businesses with revolving credit facilities should confirm the applicable rate for their specific loan structure using the CGTMSE fee calculator before sanction.

7. Outstanding Balance at Renewal

In renewal years, the CGTMSE fee applies to the outstanding loan balance, not the original amount. Regular repayments reduce the outstanding balance, thereby lowering the renewal fee each year.

Benefits of Using a CGTMSE Guarantee Fee Calculator

Using a CGTMSE fee calculator offers several advantages for business owners. Here are the main benefits. 

1. Faster Loan Cost Estimation

Entering the loan amount and borrower category takes seconds. The calculator displays the exact fee without requiring the user to manually locate the applicable slab and apply the rate. This saves time during the loan evaluation stage.

2. Better Financial Planning

Knowing the CGTMSE guarantee fee in advance allows a business to include it in the overall loan cost calculation. This prevents surprises at the time of sanction and helps the business assess whether the total borrowing cost fits within its repayment capacity.

3. Compare Multiple Loan Amounts

A business unsure of the right loan amount can use the CGTMSE fee calculator to compare fees for different loan amounts before deciding. This comparison helps find the amount that balances business need with manageable fee liability.

4. Understand Annual Fee Liability

The calculator shows both the first-year fee and the renewal fee, giving the borrower a full picture of how the CGTMSE charge changes year on year as the loan is repaid. This is useful for forecasting total interest and ancillary costs over the full loan period.

Eligibility for CGTMSE Scheme

To qualify for the CGTMSE scheme, your business must meet the following eligibility criteria. 

• Age: The applicant must be an Indian citizen aged 18 years or above.
• Enterprise Type: Both new and existing enterprises can apply.
• Business Activity: The business should be in trading, manufacturing, or service activities as per the MSMED Act, 2006.
• Udyam Registration: The enterprise must have a valid Udyam registration number.
• Lending Institution: The loan must be from a registered Member Lending Institution (MLI). MLIs include scheduled commercial banks, NBFCs, Small Finance Banks, and regional rural banks.
• Credit Facilities: The scheme covers term loans, working capital loans, and composite credit.
• No Collateral: The loan should generally not involve collateral or third-party guarantees.
• Excluded Activities: Certain activities are not covered. These include pure agricultural activities, land purchase, and speculative businesses.

Borrowers eligible for a 10% concession on the CGTMSE guarantee fee:

• Women entrepreneurs
• SC/ST borrowers
• Micro enterprises
• ZED-certified units
• Businesses in the North East Region
• Businesses in Aspirational Districts

Conclusion

The CGTMSE scheme has made it easier for small businesses to get loans without collateral. The CGTMSE guarantee fee is a small cost for this benefit. The fee is calculated as a percentage of the loan amount. The rate depends on the loan slab, borrower category, and other factors. Using a CGTMSE fee calculator helps you estimate this cost quickly. You can plan your finances better. You can compare different loan options. The calculator is simple to use and gives instant results. 

My Mudra helps MSME borrowers compare CGTMSE-backed loan options from multiple lenders on a single platform, making it straightforward to identify the right loan amount and lender without visiting each bank separately. My Mudra's MSME loan comparison service and application support align directly with the needs of businesses evaluating their CGTMSE fee liability and total loan cost before applying.

Also Read:
- How to Apply for CGTMSE Loan?
- Difference Between CGST and SGST with Examples (2026)