Financial institutions provide you with various options to repay your business loan. One of the most simple and popular methods out of them is Equated Monthly Instalment (EMI). The gross loan amount is split into equal sums, taking into account the applicable interest rate.
These equal sums are to be paid by the borrower on a monthly basis. EMIs are a great way to reduce the burden of loan repayment.
The convenience of repaying a loan through EMIs is facilitated further by a business loan EMI calculator. This online tool has been introduced by reputed financial companies on their official websites to help you pay off your business loan responsibly.
What is an EMI calculator?
EMI calculator is an online tool that helps determine the EMI outflow of an availed loan. A business loan EMI calculator provides you with the estimated amount you will have to pay every month to repay the loan amount you borrowed. An EMI calculator calculates the monthly instalment on the following parameters-
- The principal loan amount you borrowed.
- Tenor to repay the loan completely.
- Rate of interest as charged by the lender.
The online tool also serves as a great way to check how much interest you will be required to pay as per the principal amount.
The business loan EMI calculator uses the following formula to calculate the estimates-
E = P x r x (1 + r) ^ n / [(1 + r) ^ n – 1]
Where E denotes the monthly instalments, P denotes the principal loan amount, r denotes the rate of interest and n denotes the repayment tenor.
For example, if you withdraw a business loan of Rs. 30 Lakh for a period of 5 years, the applicable interest rate will be 18%, and the EMI will stand at Rs. 76,180. Whereas, if you withdraw the same amount for 8 years, the EMI will be Rs. 59,170.
How to use the business loan EMI calculator?
An entrepreneur has to plan the budget and streamline funds according to his liabilities. Thus, he/she is likely to be concerned about the loan repayment even before withdrawing one. It not only helps to improve the odds of procuring a business loan but also assists in being well-prepared for the repayment.
The EMI calculator is simple to use and is accessible at all times.
Here is a step by step process of how to use the business loan EMI calculator-
Step 1- Visit the official website of the financial institution.
Step 2- Click on ‘Business loan EMI calculator’ in the business loan page.
Step 3- You will be redirected to the page displaying the EMI calculator.
Step 4- Enter the loan amount you require.
Step 5- Choose the tenor within which you wish to repay your loan.
Step 6- The applicable interest rate will be set automatically to provide you with the final estimates of the EMI.
You can alter the entered details and see the estimates change accordingly. The calculator can be used to compare the EMIs according to your loan requirement and repayment tenor. Once you are convinced with the EMIs, you can proceed with the loan application. This assists you in making a well-informed and well-planned decision.
Financial institutions also like Bajaj Finserv additionally help borrowers with an easier application process with pre-approved offers. These offers are available on home loans, business loans, personal loans, as well as on a vast range of other financial products offered by this NBFC.
Business loans in India provide a substantial amount of financial backing to business enterprises. Using the EMI calculator, a business owner can plan his/her business loan repayment and cope up with immediate fund shortage.
Referring to leading financial institutions with a positive financial history can help avail the most beneficial loan terms and features.