A business loan repayment plan demands careful planning, and paying your business loan EMIs on time requires efficient financial management so that your monthly budget does not dwindle. By using the Business Loan EMI Calculator available on Bajaj Markets, you can determine your monthly EMI obligations so that your finances are in place.
The Business Loan EMI calculator on Bajaj Markets is a simple online tool to estimate the EMI you need to pay each month. You need to enter three inputs to find out the EMI. They are:
Loan Amount: The loan amount you want to apply for.
Rate of Interest: This is the amount that a lender charges on the principal loan amount. It is expressed in percentage terms.
Loan tenure: This is the period you need to repay the loan.
The formula used to calculate Business Loan EMI 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 every month
'n' is the tenure or duration of the loan
The interest rate is the amount levied by the lender on the offered loan amount, and it is expressed in the form of a percentage of the principal amount. There are two kinds of interest rates that are typically quoted to borrowers and one is the nominal interest rate and the other is Annual Percentage Rate (APR).
The nominal interest rate is the total annual interest rate levied by the lender. On the other hand, APR is the total loan cost that comprises the processing fee, interest fee, administrative fee, and more. The effective interest rate is calculated using the following formula:
(1+r^n)-1, where r is the periodic rate of interest.
There are innumerable benefits of using a business loan calculator. Some of the notable pros include:
The business loan EMI is impacted by three major factors that include:
Missing an EMI payment can lead to a late payment fee. Moreover, missing a loan or credit card due date also has an adverse impact on your credit score.
Calculating the EMI beforehand can help you determine the amount you would need to pay each month so that you can manage your finances accordingly.
For loans availed on fixed interest, the EMI remains the same.
No, once the loan is disbursed, the interest component cannot be changed. You would need to undertake a business loan balance transfer to get better interest rates and reduce your interest liability. Another way, which is recommended, is to maintain an excellent credit score and negotiate the interest rates with the lender at the time of loan application.
EMIs can be paid online through NACH debit mandate, ECS, or cheque.