Every business requires an adequate amount of capital for funding and for paying expenses, regardless of the business size, and here, the role of business loans comes into play. As the name implies, business loans explicitly intended for business purposes. It is a kind of loan that business owners can avail to meet the urgent needs of their business and to make the growth smooth and consistent. These loans help the business owners in gaining financial assistance at a reasonable rate of interest so that they can not only grab the business opportunities but also don’t get stuck in economic issues. If you’re searching for the best small business loans providers in India, then ZipLoan is the most excellent option to consider. It requires minimal documentation and processes your loan request faster and disburses your loan within three days.
But before applying for business loans, it is essential to determine what EMIs you’ll have to pay after sanctioning the loan. It is preferred to calculate your loan EMI in advance to get ready for paying that particular amount to the lender every month. More to this, the calculation of EMI also helps you to know whether the lender is charging accurate EMI or not. There are two significant ways to calculate EMI on business loans, namely – by using the excel sheet and by using mathematical formula. Let’s discuss both of them in a bit of detail.
2 Ways to Check EMI on Business Loans
- Using Excel Spreadsheet
The first and foremost option to determine EMI on a business loan is by using an Excel Spreadsheet. It is one of the easiest and time-saving methods to calculate EMI. In the excel sheet, the function for determining EMI is PMT, instead of EMI. To make calculations, you require three variables, namely – the monthly rate of interest (percentage), the value of the loan or present value (PV) and several periods (nper). With the help of these variables, you can easily find the exact EMI on your business loan.
The Formula used in an Excel spreadsheet for calculating EMI is:
PMT (rate, nper, PV)
Let’s understand the same with one example.
Example: Suppose the monthly rate of interest is 12%, time is four years, and the present value is Rs 4,45,000, so by using the formula, EMI on this loan is:
PMT (0.01, 4*12, 445,000) = Rs 11,718
Note: Here, the number of periods represents the total number of EMIs. Also, the resultant value can appear negative or red, which represents the cash outflow of the borrower.
- Using Mathematical Formula
The next common option to choose for calculating business EMI on business loans India is by using a mathematical formula. The mathematical formula for calculating EMI on the business loan is:
EMI = [P x R x (1+R) ^ N] / [(1+R) ^ N-1]
Where P stands for the principal value or the loan amount, R is the rate of interest per month, and N is the number of months. By using the formula as mentioned above, you’ll get the same result as an Excel spreadsheet. This formula is designed to facilitate the borrowers as spreadsheets are not available everywhere.
Make use of business loan calculator now and check out your business Loan EMI in just a few seconds.
Factors Affecting Business Loan EMI
After calculating EMI on the business loan, it is the right time to know what factors are affecting the same. These factors can influence your business loan EMI to a great extent and can make it high and low. Let’s find out.
- Loan Amount: The loan amount is the primary factor that affects business loan EMI the most. It is the amount you need to borrow for business expansion or growth. Greater is the loan amount, and higher is the loan EMI.
- Loan Tenure: The second important thing with a significant influence on the loan EMI is none other than the loan tenure. Loan tenure is the period in which you can repay your loan. While calculating loan EMI, it is essential to remember that the longer the tenure, the lower the EMI. ZipLoan is offering loan tenure of 12 months, 18 months, and 24 months and, therefore, borrowers can easily choose the tenure that suits their budget in the best possible way.
- Rate of Interest: Rate of interest is yet another critical determinant of Loan EMI. It is the interest rate charged on the principal loan amount. The interest rate for a business loan is directly proportional to the loan EMI. Higher is the rate of interest, and higher is the loan EMI.
Benefits of Business Loan EMI Calculator
Calculating business loans EMI boasts numerous benefits such as:
- It offers you the exact EMI amount: With the help of this EMI calculator, borrowers can easily find out the exact EMI so that they can keep it handy every month. Manual calculations can sometimes produce wrong results, and thus, this calculator helps you in finding the exact amount.
- It saves time: Needless to mention, that the EMI calculator produces the result within a blink of an eye and thus, saves lots of time and effort which otherwise is wasted in manual and cumbersome calculations. All you need to do is enter the required details and calculate loan EMI with much ease and comfort.
- It helps you in planning your finances: Business loan EMI calculator helps you in planning your finances and allows you to check whether you would be able to fulfill a particular amount of EMI per month or not.
Applying for a business loan is vital to keep business operations smooth and under control and this Loan EMI calculator helps you in knowing the accurate EMI value so that you can keep it ready every month, thereby helping you in facilitating cash resources planning. This calculator is simple to use and time-saving as well.
Get an instant business funding with ZipLoan and calculate loan EMI in just a few seconds. ZipLoan will help you in maintaining the business funding and keep your financial concern under control.