Business loans are loans that companies avail themselves of with a specific interest and repayment period to meet the growing business requirement. Business loans help to fund the business to expand existing business, production, buy new machinery, etc. Funding the business at the correct time is a booster for any business to ensure smooth business functioning. As well as business loan EMI calculation and repayment is an important element in business.
However, with structured business loan EMI options and extended loan tenures, you can plan on your workforce, latest technology, a new business idea and manage your company’s cash flow. The EMI payment should be managed systematically for the business loan.
What is Business Loan EMI? How to Calculate the EMI?
Business loans can be repaid in different ways, one of the coolest ways to repay a business loan is through Equated Monthly Instalments (EMIs). The loan amount will be divided into equal fixed sums that can be paid every month till the full repayment of the loan.
An EMI consists of two parts, the principal loan amount and the accrued interest. MSMEs find it easier to repay business loans with EMIs, as it avails the business to fund expensive assets and expansions without hurting the smaller operating budgets. NBFC loans offer flexible business loan EMIs that makes the repayment of business loan two-times faster by opting for bi-weekly repayments. Faster repayments mean faster access to refinance for the same amount or a larger business loan with the loan offer.
The Business loan EMI Calculation for Business Loan involves a formula i.e,
E = P*r*(1+r)n / (1+r)n-1
‘E’ is the EMI
‘P’ is the loan amount
‘r’ represents the rate of interest
‘n’ stands for the loan tenor
What are the Business Loan EMI Calculation options available?
- Fixed EMI
Fixed EMI calculates, the principal amount and the interest amount charged over the loan tenure will be fixed. This is a fixed business loan meanwhile the monthly installment remains the same for the entire loan period. This business loan repayment method is ideal for one who is having a steady and consistent income source.
- Structured EMI
A structured EMI plan allows you to choose a repayment process that is best suitable for your salary and other expenses. If you are a person who can bring more money at regular intervals for the repayment of loans and expenses, then this EMI plan is perfect for you.
What is a Business Loan EMI Calculator?
You can plan your business loan EMI amount with help of an EMI calculator which is available online. This gives an amount that you will pay towards the interest payment and principal payment over the overall loan tenure, also you can plan your monthly budget and other business expenses to ensure a timely repayment.