Advancements in technology and digitisation have transformed the financial industry in more ways than one. Customers can now apply for a loan or transact without any complexities using lenders’ websites or apps. They can even check their eligibility and assess the cost of borrowing using several digital tools.
The Business Loan EMI Calculator is one such digital tool that helps you assess the EMI you need to pay towards your Business Loan, make adjustments in the loan amount, try various combinations with the loan tenure, and compare different financial institutions based on the interest rate offered by each.
Here we will learn what a Business Loan EMI Calculator is and how you can use it!
What is a Business Loan Calculator?
If you are thinking of expanding your business or boosting the profitability of your organisation, an unsecured Business Loan comes in handy. It is one of the most important loans you apply for based on your business profitability, credit score, age, tenure, and requirements.
Before you fill out a Business Loan application online, check your eligibility criteria to avoid rejections. In this regard, it is crucial to use the Business Loan EMI Calculator to get an idea of how much you will pay based on your loan amount, loan tenure and the interest rate offered by the lending institution. You can put different interest rates offered by different lenders, and change the tenure or the loan amount to get a suitable loan amount.
You also get the benefit of a loan amortisation schedule, which gives you a month-by-month breakup of EMIs to be paid, and the bifurcation of principal and interest you would be paying each month. This schedule is prepared for the entire Business Loan tenure.
How to Calculate Business Loan EMI?
You can calculate your Business Loan EMI in the following ways:
Manually
Using the formula EMI = [P x R x (1+R) ^ N] / [(1+R) ^ (N-1)], you can manually calculate the Business Loan EMI, where
P = Principal amount
R = Rate of interest offered by the financial institution
N = Loan tenure
This method is difficult and prone to errors.
Using an Excel Sheet
If you are technically savvy, you can use the PMT formula and assess your Business Loan EMI using an Excel sheet.
Business Loan EMI Calculator
The easiest and most convenient way to calculate your Business Loan EMI is to use a free and reliable digital calculator that follows the same formula as a manual and gives results instantly.
How Does a Business Loan EMI Calculator Help You?
Here are different ways in which a Business Loan Calculator can help you:
It lets you compare Business Loan providers.
One way of comparing Business Loan providers is by comparing the interest rates. The other way is to consider all factors like loan amount, loan tenure, and EMI amount, then decide which financial institution offers the best deal. Ensure you select the right one based on individual requirements and monthly budget.
It lets you modify the loan amount and tenure.
If you feel that the monthly EMI calculated is way out of your monthly budget, you can modify the loan amount and tenure to reach the most affordable EMI amount. You can decrease your loan amount or increase your loan tenure to bring down your monthly EMI amount.
It helps you plan Business Loan prepayments.
EMI calculators help you in future financial planning. The EMI amortisation schedule gives you a breakup of interest and principal amount. It also lets you understand the remaining number and amount of EMIs month-by-month. Thus, if you plan to prepay or part-pay your Business Loan, you can use the calculator and take these decisions accordingly.
It eradicates manual calculations.
The biggest advantage of using this digital tool is ease, comfort, and practicality- you don’t have to rack your brains with manual, complicated calculations anymore with the help of this tool.
You can use the tool on the go.
EMI Calculators are available on websites and mobile apps of top lending institutions. You can access them from your smartphone, tablet, laptop, or desktop at your convenience anytime, anywhere for free.
Conclusion
Now that you know how beneficial and easy it is to use, use a Business Loan EMI Calculator before you fill out your Business Loan application. Utilise it as per your convenience and need and finalise the best Business Loan offer today.