The loan that you borrow from a bank or NBFC for your business or business-related work is known as a business loan. It is an easy way to generate funds for a business. There are many Banks and NBFC which offer business loan. While availing the business loan, you should consider three critical factors:
- loan amount
- tenure of the loan
- interest rate.
It is advisable to check the EMI amount you have to pay per month or year for business loan, so you must calculate the amount with EMI calculator.
Business Loan Eligibility
You have to fulfill some simple business loan eligibility criteria if you want to avail of it. These criteria are:
- Your age should be between 25-55 years at the time of loan application.
- Your business must be operating for at least three years.
- Your business must have its income tax returns for at least the last year.
Business loan EMI
EMI, or Equated Monthly Instalment, is the installment that you pay every month to the lender of the loan. EMI calculation is possible by simple mathematical methods based on the loan amount, rate of interest, and tenure of the loan.
Business loan EMI calculation
You can calculate business loan EMI by any of the three ways:
- Using Mathematical formula
Business loan EMI calculation by a mathematical formula or a calculator uses the following formula:
EMI = (P x Rx [1+R ^N]/ [(1+R) ^N-1],
P = Principal amount
R = Interest rate per month
N = number of monthly installments.
- Using a spreadsheet
In a spreadsheet, you have to use the function PMT for calculating EMIs. The EMI calculator formula in excel uses the following syntax: PMT (rate, per, PV).
Rate – Interest rate for the loan.
PV – Present value/principal.
- Using online EMI Calculator
The most accurate and quick way of calculating the business loan EMI is to use an online loan EMI calculator. Enter the below details on the EMI calculator–
- Principal (loan amount
- Rate of interest
How to use a Business Loan Calculator?
You can use a business loan online calculator by following some simple steps.
Step 1: Fix the loan amount. It is the amount that you wish to borrow.
Step 2: Set the rate of interest. The lender generally predetermines this.
Step 3: Set the loan-tenure in months. It is the duration for which you intend to take a loan and during which you will have to repay the loan amount. It is adjustable and flexible, depending upon your needs.
Step 4: Add the processing fee, if any. Sometimes, the lender may ask for this.
After feeding the data in an online business loan emi calculator, you will get the exact EMI payable. This is the easiest option to decide the most convenient and suitable loan deal for your business.
Advantages of using an online Business Loan Calculator
Besides sparing you from doing the tedious manual computations, a business loan EMI calculator offers many other advantages:
- Easy visualization: An online business loan calculator can generate the output in the numerical as well as graphical form as pie charts or bar charts, which are easy to understand and interpret.
- Easy Comparison: It provides a comparison between the lenders side-by-side, which helps you to select the best deal available.
- Comfortable setting of the loan details: You can select the best combination of the rate of interest and the tenure by feeding different values to the online calculator to get the right combination for you.
You must calculate the amount of EMI you will have to pay before availing a loan, for which the online loan EMI calculators are the best tools for the job. Select the deal that best suits you.