Every business owner applies for a loan at some point for the sustenance or growth of their business. If you’re a first-time applicant, you could perhaps be hesitant about visiting the branch. In that case, you can visit the lender’s website and learn about your eligibility and the interest on the loan amount. The tool that enables such calculations for business loan is called an Business Loan Calculator. It is an online calculator where you put the basic details of the loan and it generates the EMI or Estimated Monthly Instalment.
How is interest on business loan calculated?
There is a formula that all banks or Non-Banking Financial Companies (NBFCs) use to decide the EMI. It is:
E = P*r*(1+r)^n/[(1+r)^n-1]
- E represents the EMI
- P is the Principal Loan Amount
- R is the monthly rate of interest
- N is the duration of the business loan
What are the benefits of availing a Business Loan?
A business loan helps the borrower for two reasons primarily:
- For the sustenance and the daily capital for running the of business.
- To expand the business and/or to acquire new offices/outlets.
The borrower can also choose between a secured loan and an unsecured loan. An unsecured loan, however, will have a higher interest loan compared to secured loan because of no collaterals.
Myths associated with Business Loan
There are several myths associated with getting a business loan. However, the general notion is not always true, and you must not let such assumptions cloud your opinion. Some common myths associated with business loan are:
Availing a Business Loan is Hard
Many SME owners think that getting a loan for their business is not easy and the process is very frustrating. If all the documents are in order and the borrower is eligible a loan can be availed in even three days. Moreover, the process is online which makes it even easier for the borrower to apply.
Perfect Credit Score
While CIBIL score is extremely important it is not true that your score must be 900 throughout. Even if the borrower has a score of 700, he will be eligible for a loan. The lender will also check his business profit, transactions and years of operation before sanctioning the loan.
Bank Loans are the Best
This statement makes no sense because the rules are the same in every establishment. Infact, NBFCs are more flexible when it comes to approving a loan as opposed to banks. The application process in NBFCs is also faster with online application, fast processing of loans, low interest rates and no prepayment charges.
Because the dominance of loans is increasing in the digital sphere. More and more people are opting for loans online, and with EMI calculator tool people are getting more clarity about their loans.
Need a business loan? Do not shy away, you can now avail a Bajaj Finserv Business Loan available on Finserv MARKETS at the most competitive interest rates. Flexible repayment options and hassle-free online application process make Finserv Markets the most preferred Non-Banking Financial Institution.
To learn more on how a business loan benefit businesses visit Finserv MARKETS.
Download Bajaj Finance App, to get personalised offers on Business Loans.
Finserv MARKETS, from the house of Bajaj Finserv, is an exclusive online supermarket for all your personal and financial needs. Loans, Insurance, Investment, and exclusive EMI store, all under one roof- anytime, anywhere!