Are you planning to loan money to grow your company? The first thing you must ensure is a comfortable repayment journey. To do this, you need a realistic picture of your total business loan cost.
To help borrowers plan their monthly budget before taking a loan, lenders offer easy-to-use online EMI calculators. In this article, we tell you how exact you can calculate the total cost of your loan.
What is the business loan EMI calculator?
Your EMI (monthly loan instalment) consists of two parts – the principal amount and the interest payable at the specified rate. Using an online business loan EMI calculator, you can easily calculate the amount you will need to pay each month towards loan repayment. You can also play around with different numbers to see how the final amount will change in each scenario.
Additional Read – Beginner’s Guide on How to Calculate EMI for Business Loan
How do online EMI calculators for business loan work?
Using an online EMI calculator is easy. All you need to know are three variables. Given below are the steps to follow –
Step 1 – The first variable that you need to enter is the loan principal amount.
Step 2 – For the next step, enter the tenure (in months or years) for which you wish to take the loan.
Step 3 – For the final step, enter the applicable loan interest rate.
And that is all. The calculator will automatically and within seconds show you the interest payable on your loan as well as the monthly instalment.
Why use the online business loan EMI calculator?
There are several reasons why you should be using an online EMI calculator, the most important being the accurate results you get instantly. Manual calculations are tedious, time-consuming, and prone to errors. With an online EMI calculator, all you need to do is enter three variables and get automatic and accurate results. Not only that, but an online EMI calculator helps you calculate business loan in advance so that you can plan your finances accordingly.
Additional Read – How to Apply for a Business Loan in 4 Easy Steps?
When you want to reduce your EMIs
It is possible that you might not always like what you see. If, upon calculation, you find out that the loan EMI is higher than what you can afford each month, there are ways in which you can reduce your EMIs. One way to lower your EMIs is to opt for a longer tenure. However, a longer tenure will also mean higher interest outgo. If you want to avoid this, you can work on getting a lower business loan interest rate. The first way to do so is to maintain a high personal credit score so that lenders will view you as a low-risk borrower. You should also compare lenders so you get the most competitive interest rate on your loan.
Remember that the total cost of your loan depends not just on the EMI but also on other charges such as processing fees, documentation charges, stamp duty charges, etc. So, ensure you factor these in before applying with a lender.
You’d naturally want a lender that offers competitive interest rates and levies minimal miscellaneous charges. Sounds like you? Come to Tata Capital today. Avail flexible EMI payments and hassle-free documentation.