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Establishing a business is a work of sheer dedication and commitment. In order to establish a business and run it efficiently, entrepreneurs are required to have a proper plan in place. Right from infrastructure and human resource to appropriate marketing strategies, entrepreneurs must take care of each and everything to ensure the success of their business. Another important aspect that entrepreneurs need to take care of is the availability of sufficient capital to initiate their startup. In order to give their vision a platform, entrepreneurs can consider availing a business loan. With a lot of financing options available in the market, finding a business loan with attractive features has become a hassle-free process. However, before applying for a business loan, entrepreneurs should review the viability of the loan-provider carefully.
If you are looking forward to availing a business loan to fund your startup, it is essential that you make its timely repayment. If you fail to repay the loan on time, it can not only affect your credit score but also the lender might seize your assets pledged as collateral while availing the business loan. Therefore, timely loan repayment should be your topmost priority after availing a business loan.
Let us understand how a business loan calculator can help you in making timely repayment of your business loan.
- A business loan EMI calculator allows you to calculate your EMI beforehand. This will give you a better understanding of whether you are in a position to afford the loan.
- Moreover, having an estimate of your EMI will allow you to plan your monthly expenses in a much better way. This will allow you to repay your business loan within the stipulated time.
How to calculate your monthly installment Using Business Loan Calculator?
You can calculate your EMI with the help of 3 parameters, i.e., loan amount, loan tenure and interest rate. You can input these values into the online EMI calculator and get an estimate of your monthly installments. In order to derive the EMI that suits you the best, you can use various permutations and combinations of these three inputs.
The basic formula used by EMI Calculators is:
E = P x r x (1+r)^n/ ((1+r)^n-1),
Where,
- E stands for monthly installments, basically the EMI.
- P is the amount that you want to borrow.
- R is the rate of interest that is calculated on a monthly basis instead of the annual rate of interest. It is derived by using the formula r = (annual interest/12) x 100.
- N is the loan tenure in months.
Before availing a business loan, it is advisable to compare various loan offers provided by different financial institutions. Make sure that you settle for a financial institution that provides business loan at the most competitive interest rate. Lower the interest rate, lower will be the overall cost of borrowing. Additionally, lower interest rate will reduce the repayment burden significantly in the long run.
Now that you are well aware of the steps to calculate your EMI, let us have a quick look at some of the major benefits of using an online EMI calculator.
User-friendly
Using an online EMI calculator is extremely simple. With the help of basic inputs that are the loan amount, interest rate and loan tenure, the EMI amount can be obtained instantly.
Error-free calculations
The output obtained with the help of EMI calculator is error-free. Hence, you can get a proper estimate of your installments and plan your budget wisely.
Time-saving
With the help of an online EMI calculator, you can calculate the monthly installment of your business loan online from the comfort of your home. Thus, the process is quick and hassle-free.
By calculating your EMI beforehand you will be able to make a well-informed decision regarding whether to avail a loan or not. It is essential that you read the terms and conditions of your business loan agreement carefully before availing it. This will help you avoid any inconvenience in the later stages.
