Business Loans: How to Calculate EMI Payments
Many businessmen do not take up business loans fearing the repayment amount and EMIs. Many people are ignorant to the actual algorithm on which the EMIs and loans, in general work.
This ignorance keeps them from grabbing the right business opportunities with the help of required funding. The calculation of EMIs on business loans is to be done on the basis of business loan interest rates.
But, for understanding that first, there is a need to understand EMIs and how do they work.
EMI- Equated Monthly Installment
EMI stands for Equated monthly installments; this is a breakdown of the loan amount in equal sums of smaller size. These installments are to be paid on a monthly basis.
They comprise not only parts of the principal amount but also the interest as per business loan interest rates. The breaking down of these installments highly depends on the tenor of repayment that you opt for.
If you go for a longer loan tenor, then the amount of each EMI will be less, and if you go for a shorter tenor, then the amount of EMI will be more.
Business Loan EMI Calculator
For calculating EMI on business loans, you can make use of an online tool called Business Loan EMI calculator. This tool is easily available on the websites of lenders like Bajaj Finserv and is very easy to use.
The calculation of monthly EMI is ensured with this simple tool. Using it before taking a loan can help you determine how much quantity of loan you can afford as per your repayment capacity.
Knowing repayment beforehand can also help to align the long-term financial plans of your business accordingly.
How Does EMI Calculator for Business Loans Work?
This online tool works on very simple algorithms based on the basic amounts and terms involved in a loan.
The loan EMI calculator takes into consideration the rate of interest, tenor and total loan amount. The formula for this calculation is:
E = p*r* (1+r) ^n/((1+r) ^n-1)
The specifications of this formula are:
- ‘E’ stands for EMI
- ‘P’ stands for principal
- ‘R’ stands for rate of interest
- ‘N’ is tenor of the loan
How to Use EMI Calculator
The process of using these calculators is very easy. The user has to first of all open the web portal of a lender, for example, Bajaj Finserv website.
The website will have the required details of loan products along with loan EMI calculator. The details like rate of interest, tenor and the amount of loan are to be entered in the calculator for getting the EMI amount.
Once you calculate the loan amount using the calculator, remember to check the pre-approved offers you can avail over your loan amount.
With pre-approved offers on Bajaj Finserv Business Loans, you can get an instant approval.
It is very important to explore the available options of funding for your business before letting a good opportunity go due to lack of funds.
Right funding at the right time can help you get high in the race with your competitors. Before shrugging off the idea of taking a loan make use of a Business Loan EMI calculator to know the repayment amount and gauge it with your capacity.
Predetermined amounts are easier to bear when compared with unknown amounts, and hence it is always smart to research well before taking credit.
Taking an organized credit can be a calculated risk when it comes to business. You will not have to go beyond your risk appetite even to meet the needs of your business.
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Category: Business
