How To Calculate Your Business Loan EMIs?

To run a business successfully, you may, at times, require to avail a business loan. Since generally the amount required every month to repay the loan is taken from the business revenue, it is imperative to determine it in advance to save the business from suffering in the future. EMIs does add to the monthly business expenses and payments.

So, to help our potential customers decide the right loan amount for them and their business, we offer business loan EMI calculator. You can use the loan calculator to evaluate the EMI online with ease.

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What is Business Loan EMI?

Equated Monthly Instalment or EMI refers to the monthly repayments towards the loan to the lender. It consists of two crucial parts, i.e. the principal amount availed and the interest cost charged on it.

Notably, the interest cost is charged on the principal loan amount for the tenure the loan is availed. So, when you decide to avail a business loan, you need to consider the principal loan amount as well as the loan tenure.

How to Calculate Business Loan EMIs?

To calculate business loan EMI, three crucial variables are required, which are the loan amount, loan tenure, and the interest rate. You can enter all these details in an online EMI calculator to get the EMI effortlessly.

Business loan EMIs are calculated using a very easy formula.

E = P x r x (1+r)n / (1+r) n-1 Here,

  • E = EMI amount
  • P = Principal amount
  • r = Rate of interest at which you will be borrowing the loan
  • n = tenure of the loan over which you will be repaying the loan.

For example, if you want to avail a loan of Rs. 1,00,000 for one year at a reducing interest rate of 25%, you can enter all these details in the EMI calculator. The EMI amount shown will be Rs. 9,505 approximately. The interest charged will be Rs. 14,054. The EMI calculator also shows the tables where they display opening balance, EMI, principal paid, interest paid, and outstanding amount.

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