Business Loan EMI Calculator

What is Business Loan EMI Calculator?

Business/MSME Loan EMI Calculator is a great help when we need to calculate the Equated Monthly Instalment (EMI) before applying for a loan. To calculate your business loan EMI, you can check it via accessing the business loan EMI calculator by filling in basic loan details, such as loan amount, repayment tenure and interest rate. The Equated Monthly Instalment (EMI) is automatically calculated, as per the entered details by the lender or any financial institution.

How does Business Loan EMI Calculator work?

There is a formula with which the financial institutions calculate the Interest Rate and EMI on the Business Loan, which can be of help to you in case you are willing to apply for the same.

The EMI calculator works on the following parameters –

• Loan amount
• Repayment Tenure
• Rate of interest

The formula that’s used is –

E = P * r * (1+r)^n / ((1+r)^n-1)

Where ‘E’ is EMI
‘P’ is the Principal Loan Amount
‘r’ is the rate of interest calculated on a monthly basis
‘n’ is the tenor or duration of the loan

Also Know – What is the average interest rate on a business loan?

 Benefits of using this formula

• It tells the exact amount of EMI to be incurred over the availed loan
• Saves time and helps in efficient loan planning
• Depicts detailed overview of availed loan via an amortization schedule
• Helps to plan finances
• You can plan multiple schedules and EMI instalment tenure and choose the one that suits your financial requirements

What are the factors that affect Business Loan EMI?

Loan amount – The amount that you are going to borrow decides your EMI amount. When the amount is higher, the EMI is high; and when the amount is low, the EMI remains low. However, it also depends on the tenure of the loan.

The rate of interest – It’s very important to choose the loan rate of interest carefully. When the rate of interest is high, the EMI will remain high, and when the interest is low, the amount will remain low.

Repayment Tenure – Tenure also plays an important role in deciding the loan EMI. A longer tenure ensures lesser EMI while a shorter tenure ensures a high amount of EMI.

Though the EMI amount remains the same, the interest payment and principal payment are not the same. These payments vary each month and keep on fluctuating, but the principal amount remains the same.

Check Business Loan EMI from Top Banks/NBFCs

Frequently Asked Questions (FAQs)

Q. What happens when someone misses the EMI amount?

Ans. If someone missed the EMI amount it will be adjusted in the next amount and that the next EMI will be double of the current EMI. Also, late payment charges will be levied, depending on the Terms and Conditions mentioned by the financial institution.

Q. Who is eligible for a business loan?

Ans. The Loan Applicant should be between 18 years and 65 years of age generally. However different rules may apply.

Q. Can the EMI amount be reduced?

Ans. Yes, the EMI amount can be reduced by increasing the tenure of the loan. Another way to reduce amount is to pay the majority of the loan amount in one go and then, pay reduced EMIs on the remaining loan amount.

Q. Can the interest in EMI be reduced?

Ans. No, it’s not possible in any circumstances. It remains fixed throughout the payment period.

Q. Why you should calculate the business loan EMI before taking the loan?

Ans. It is important to calculate EMI before taking the loan because this will clear the picture and then you will be able to secure a loan with suitable EMI.

Q. Does EMI remain the same or change in the future?

Ans. The EMI usually remains the same; however, if the government decides to increase the interest rate, the EMI amount will increase.

Securing a Business Loan or MSME loan via EMI calculator is not a difficult task and can be secured through accurate calculations, deciding on a suitable tenure and loan amount. It is in fact always advisable that you should calculate your loan EMI before applying for any loan, so you are well aware of the instalments you need to pay every month.