The substantial growth of the MSME sector in India has prompted financial institutions of this country to offer business loans at reasonable terms. This has opened doors for business owners to avail credit and expand their organisation without worrying about funds. At the same time, easy EMIs have also made repayment simpler, further encouraging businessmen to avail credit.
Competitive rates of interest, borrower-friendly terms, and the convenience of applying for a credit have played a significant role here. Online tools like business loan EMI calculators have also helped individuals to calculate their repayments in advance and plan accordingly.
What are the benefits of a business loan EMI calculator?
The benefits of this calculator are the followings –
Probably the most significant advantage of this calculator is the convenience it offers. Instead of using pen and paper and spending a considerable amount of time on finding out the exact EMIs, one can find it via this calculator within seconds.
The possibility of a mistake remains with manual calculations, and with an online calculator, one can avoid that. The intervention of a machine ensures that the estimates are 100% correct.
- Presents a structure
Business loan EMI calculator offers a structure to the consumers that they can follow to make their repayment. Most of the EMI calculators available online offer a detailed representation of the repayment procedure, and individuals can download it for future reference.
Such representations include various information regarding a business loan, such as opening balance, tenure, interest paid, principal paid, etc. in a table format.
- Make an informed decision
With the help of such calculators, prospective borrowers can make an informed decision. They can customise it and experiment with various ranges (of tenure and interest rate) to find the information they are looking for as per their need.
- Financial planning
Another significant advantage of a business loan EMI calculator is that it aids in financial planning. Once borrowers know the monthly instalments that they need to pay, they can plan other expenses of the business accordingly.
- Self-learning tool
Financial calculations are complex, and borrowers can face issues understanding them correctly. In this regard, the use of online tools like this helps them to find the correct answers. With necessary details, prospective business loan applicants can quickly learn about the credit they are planning to avail.
It uses the simple instalment calculation formula, i.e. EMI = [P x R x (1+R) ^N]/[(1+R) ^N-1]. Here P stands for principal, R stands for rate of interest and N for the number of instalments.
Along with these, this calculator also offers a detailed moratorium table of the loan that helps prospective borrowers to understand –
- Total repayment amount
- Total interest payable
- The ratio of interest and principal repayment
Individuals can learn more about their credit and chart an effective repayment plan by using a business loan EMI calculator.
Calculating business loan EMIs is the first step towards a loan application process. After this, borrowers must check the eligibility criteria, and get the essential documents to avail this credit.
Financial institutions require every applicant to meet certain eligibility criteria to apply for a credit. Although these usually vary between lenders, some of the key requirements include –
- Age: Applicants should be in the age group of 23-55 years.
- Age of business: The business they are applying for must be in operation for at least three years.
- Income tax filing: Respective business must have the income tax return filed for a minimum of one year.
Along with that, applicants need to submit certain documents attesting for the eligibility criteria. Here is a list of documents that borrowers must keep in order to avail this financial product.
- KYC documents.
- Business ownership documents.
- Financial documents of the organisation (copy of Income Tax Return, bank account statement of last 6 months, and an audited copy of balance sheet and profit and loss statement of the previous two financial years).
Reputed financial institutions like Bajaj Finserv also introduced online tools like EMI calculators on their website. Borrowers can take the assistance of it to calculate their business loan instalments and apply for an advance accordingly.
Along with that, the pre-approved offers provided by the company also help borrowers to avail a credit quickly. It streamlines the application process and saves time. It is available on financial products like business loans, personal loans, etc. Applicants can check their pre-approved offers by providing their essential contact details.
Business loan EMI calculators are simple and intuitive online tools, and help borrowers to calculate their monthly instalments in advance and quickly. With assistance from it, applicants can now make an informed decision while applying for a loan and chalk out a way to responsibly pay off their small business loans.