Business

Here’s how Business Loan EMI Calculator Works and How to Use it

Business loans offer a substantial credit (of up to Rs. 30 Lakh) over a flexible tenor and are one of the ideal ways to meet your professional requirements.

However, to prevent the credit from becoming a burden on your pocket, it is essential that you are aware of your EMIs and plan your finances accordingly.

Your EMIs can be calculated in two ways – by the EMI calculation formula or with the help of a business loan EMI calculator.

The formula for Business Loan EMI calculation is:

EMI = [Principal amount x tenor x (1 + tenor)] / [(1 + interest rate) ^ tenor – 1]

Where,

  • ‘P’ stands for the loan amount you have availed (also known as the principal amount).
  • ‘N’ denotes the loan tenor.
  • ‘R’ signifies the rate of interest.

However, the mathematical calculation is a complex process, and there can be mistakes during the calculations. In such cases, it is best to use a business loan EMI calculator to get accurate results minus the hassle.

To use a Loan EMI calculator –

  • Visit the official website of your lender.
  • Select business loans under the ‘Loans’ section.
  • Access the calculator available on the product page.
  • Share your credit amount, loan tenor and rate of interest to estimate your EMIs and the total cost of your loan.

Given below are some examples that you can consider to understand how a business loan EMI calculator works.

Example 1.

If you are sure of the amount you want to avail, you can alter your loan tenor to get the EMIs that will suit your budget. For example –

  • Principal amount = Rs. 25 Lakh
  • Loan tenor = 48 months
  • Rate of interest = 18%

EMI = Rs. 73, 437

Total cost = Rs. 35,25,010

Example 2.

To reduce your EMIs you can increase the loan tenor, such as:

  • Principal amount = Rs. 25 Lakh
  • Loan tenor = 96 months
  • Rate of interest = 18%

EMI = Rs. 49,308

Total cost = Rs. 47,33,574

Example 3.

To pay the dues of your quick business loans earlier, you can reduce your loan tenor, like:

  • Principal amount = Rs. 25 Lakh
  • Loan tenor = 36 months
  • Rate of interest = 18%

EMI = Rs. 90,381

Total cost = Rs. 32,53,717

The above examples denote that increasing your credit tenor reduces the EMIs, but contrarily, it increases the total cost of your loan.

In case you are sure of the EMI you can alter the credit amount and credit tenor to calculate your EMIs using a business loan EMI calculator. Consider the below-mentioned examples to understand how –

Example 4.

  • Principal amount = Rs. 13,83,030 Lakh
  • Loan tenor = 36 months
  • Rate of interest = 18%

EMI = Rs. 50,000

Total cost = Rs. 17,99,995

Example 5.

  • Principal amount = Rs. 25,35,080 Lakh
  • Loan tenor = 96 months
  • Rate of interest = 18%

EMI = Rs. 50,000

Total cost = Rs. 47,99,969

To enjoy such a minimal rate of interest that will keep your EMIs low, you can choose a Bajaj Finserv Business Loan.

On their advances, you can enjoy foreclosure facilities, instant approval, online account access, substantial loan amount, flexible tenor, collateral-free loans, quick disbursal, and several other attractive features and benefits.

Existing customers can also enjoy pre-approved offers that reduce the hassles of the application process and also save you time.

These pre-approved offers are available on a range of financial products such as business loans, personal loans, home loans, professional loans, etc.

You will have to share only some essential details like your name and phone number to take a look at your pre-approved offer.

To be able to calculate the EMIs conveniently, it is essential that you know the interest rates. Furthermore, to avoid debt accumulation and hefty late payment fees, make share that you pay your EMIs on time and clear the dues of your quick business loans.

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