How To Calculate Interest On A Business Loan?

Avail a business loan to meet all the financial needs of your small business unit. You can use a business loan EMI calculator to calculate the interest cost. It will provide you with an estimate of the outflow of the EMIs, and accordingly, you can plan the business finances. As estimation of EMIs will help in facilitating proper financial planning in the long term. Ziploan
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What is a Business Loan EMI Calculator?

Also known as EMI calculator, it is a tool that helps the borrowers to calculate the total interest payable by the end of the tenure. Thus, it helps in comparing business loans from different lending institutions and lets you choose the most financially viable option. You can also select a suitable EMI amount that fits your pocket and, thereby, decides on the business loan amount and tenure.

The formula for Calculating Business Loan EMI

The basic formula to compute EMI is as follows:

EMI = P x R x (1+R) n / {(1+R) n-1}

Here:

Let’s now understand how the EMI is calculated using the above-said formula:

Supposedly, a business owner avails a small business loan of Rs 5,00,000 (P) whose interest rate (R) is 18%. The loan tenure is two years. As per the formula given above, the EMI calculation will be as follows:

EMI = 5,00,000 x 18%/12 x (1+18%/12)2 / {(1+18%/12)2-1}

EMI = Rs 24,963

Therefore, the loan EMI for a loan of Rs. 5,00,000 for two years at an interest rate of 2 years will be Rs 24,963.

ZipLoan also uses the same formula to compute business loan EMI. You can use our EMI calculator to determine the interest component in your monthly payment. The calculator is simple and straightforward to use. All you need to do is enter the required details to get the results. You can use our EMI calculator by entering the following details:

Loan amount, with the maximum limit of Rs 5 lakh
Loan tenure, if you have opted for two years, then enter 24 months
Applicable interest rate

Once you enter all these details, you will get the following results:

With the EMI calculator, you can determine the best loan amount and tenure that suits your business finances. Consequently, you can also apply for a business loan with ZipLoan to meet the various needs of your business.

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