Unique Business Loan variants | Up to ₹ 1 Core* | Tenure up to 60 months
Being a business owner, you need to raise money at a cheap loan rate in order to save much more money. By using the Business Loan EMI calculator, the individual can correctly calculate the amount required to pay the debt and schedule a comfortable repayment period.
An equated monthly installment (EMI) is a fixed monthly payment made by the borrower to the lender on a specified date each month. The EMIs are made up of both principal and interest amounts, allowing the monthly Expense to Cover the repayment of the loan in full over a specific timeframe known as the tenure.
Having a set EMI amount benefits borrowers as they are aware of the exact monthly payment towards their loan, simplifying financial management. By using a Business EMI calculator, you can monitor the monthly installments in the form of EMIs required for repayment to your lender.
Grahaan Capital provides a free EMI calculator for Business Loans in India, enabling you to efficiently plan your loan. This tool allows you to calculate your Business Loan EMI, determine the total interest paid, and access the amortization schedule.
Computing the interest for a Business Loan is one of the main factors that determines the amount of money a borrower pays back to a lender. However, the interest computation of a Business Loan is quite complicated; it becomes more complex if you deal with various loan types or lender types.
The interest is calculated as per the following formula:
E = [P x R x (1+R) N] / [(1+R) (N-1)]
Where,
○ P = Principal or the loan amount
○ R = Monthly interest rate (annual interest rate/12)
○ N = Number of monthly installments (loan tenure)
○ E = Equated monthly installment (EMI)
Before making a decision, it is crucial to conduct a thorough search and comparison of interest rates and repayment terms for Business Loans offered by various lenders. Moreover, Grahaan Capital provides a free Business Loan EMI calculator that can assist you in determining the most favorable interest for your loan. By utilizing this tool, you can make well-informed decisions regarding your borrowing requirements.
Three key factors affect Business Loan EMIs. Here is a breakdown of each for your understanding:
To reduce the EMI amount, there are four strategies you can consider:
Reduce amount of the loan
The lower a loan amount, the smaller is an EMI and it means that the monthly repayments becomes less. Using the Business Loan EMI calculator, one can calculate how the EMI will decrease if the loan amount box is adjusted.
Consider a long-term Business Loan
A longer tenure implies that the EMI will be spread out over a longer time line, lessening the monthly payments. Therefore, remember that choosing the tenure of a long tenure will mean paying more interest on the Business Loan.
Get a low interest rate
Getting a lower interest rate can help you get a reduce EMI amount as interest rate is one of the key determinants of the loan EMI. A good credit score helps you get a better rate of interest.
Prepay the Business Loan at least once during the term
The repayment of the Business Loan in a single payment during the loan term will cause the remaining loan amount to be reduced, and thereby, reduce the monthly EMIs.
A business loan amortization table is a concise schedule detailing the repayment of a loan. It includes the beginning balance, payment amount (comprising principal and interest), principal portion, interest, and ending balance. This table aids borrowers and lenders in understanding repayment dynamics, including how payments are distributed between principal and interest, and tracks the decreasing loan balance over time.
Any missed EMI for a loan will be added to the next month's EMI. However, keep in mind that missed EMIs result in late payment charges. It is also detrimental to your credit score. To avoid such situations, it is best to automate your payments to pay EMIs on time.
Financial institutions typically charge a fixed interest rate on a business loan, so the EMI remains constant throughout the loan term. However, if your lender offers this loan at a floating rate or you choose to reschedule the repayment terms, the EMI will change.