Bank credits to the medium-sized industry registered a growth of 13.8% in 2020. Thanks to the flexible government schemes, this financial support continued till the end of the fiscal year. The banking sector successfully disbursed credit to MSMEs, approximately around Rs.9.5 trillion as of March 2021.
But taking a loan and calculating its instalment becomes cumbersome for individuals, leading to errors. This is where the business loan EMI calculator plays an important role.
6 benefits of using a business loan EMI calculator
Business loans are substantially helping to revive the business expansion amidst the economic downturn. It also calls for an opportunity for budding entrepreneurs to receive credit and fund the business requirements.
However, it is important to know the exact EMIs to plan loan repayment without faltering. Here a business loan EMI calculator plays a crucial role.
Take a look at the following 6 benefits of using a business loan EMI calculator:
- Saves time and energy
Manual calculations consume considerable human effort. Hence, a business owner many not have enough time, making it difficult for him/her to calculate the EMI manually. On the other hand, using a business loan EMI calculator helps an applicant know the exact amount in a few seconds.
- Accurate estimation
As an online financial tool, a business EMI calculator eliminates the chances of human errors. Borrowers, before loan application, only need to enter the required variables to know the monthly payables.
- Plan the finances
Operating a business requires a huge investment. Accordingly, one needs to strategise financial planning for an efficient allocation of resources. Using a business loan EMI calculator helps a borrower to know the exact monthly instalment in advance. This makes it easier for him to calculate his budget and plan finances accordingly.
- Choose a convenient tenor and amount
A business loan EMI calculator allows an individual to enter the tenor and principal amount for calculation. Thus, it gives a fair idea to the borrower about the loan amount and how many years one needs to repay a loan. One can adjust the amount and tenor on the calculator that fits his financial capacity. Accordingly, borrow an ideal credit and select a suitable tenor that caters to financial requirements and repayment capacity.
- Compare between lenders
Evaluation of monthly instalments in advance allows borrowers to compare the lenders offering business loans with the nominal interest rates and encourages them to make an informed decision.
- Free from usage restrictions
One of the most appealing features of an online business EMI calculator is that you can use it without any usage restrictions. Also, you only need internet access to get your EMI estimation whenever you require it.
Many leading financial institutions like Bajaj Finserv offer free online business loan EMI or GST interest calculator without usage restrictions. The NBFC also extends pre-approved offers, which streamline the loan application process. Check your pre-approved offer by submitting your name and contact number.
How does a business loan calculator calculate the EMI?
Take a look at how a business loan EMI calculator works to make one’s monthly EMI calculation hassle-free:
Individuals need to enter the following data:
- Loan amount or principal
- Interest rate
The business loan calculator calculates the EMI using the following formula:
E = P x r x (1+r)n / (1+r) n-1
E stands for EMI or Equated Monthly Instalment
P is equivalent to the principal or the loan amount
R and N equal interest rate and tenor, respectively. Interest rate is calculated monthly, while tenor is calculated up to 84 months.
For instance, if an individual takes a business loan of Rs.20 lakh at an interest rate of 17% for 4 years, then his EMI calculation equals to:
E = 20,00,000×17%x (1+17%)x4/(1+17%)4-1
How to use a business loan EMI calculator?
Here’s the simple step-wise guide on how to use a business loan EMI calculator:
Step 1: Visit the official website of your preferred financial institution
Step 2: Go to the business loan page and navigate to the EMI calculator page
Step 3: Now enter the loan amount, tenor and interest rate to get the monthly estimate
The digital lending market is expected to grow by 48% by 2023. This also encourages the utilisation of other online services like using a business loan EMI calculator. Therefore keep all these pointers in mind while you calculate EMIs using a business loan EMI calculator.