Small business owners often approach lenders for funds. Whether it is to purchase new equipment or to meet working capital requirements, a small business loan can help in several ways. The repayment of a loan happens through EMI. Equated monthly installments or EMI is the amount you pay each month to the bank or the lender until the entire loan amount is paid off. The EMI will consist of the principal amount and an interest component. A loan interest calculator is an efficient tool that helps when applying for a small business loan.
The loan EMI calculator uses three parameters to give you an EMI estimate- the loan amount, tenure and interest rate charged on the loan. Using EMI Calculator, you can get an insight into the total loan amount you will pay on the loan. EMI calculation can be complex and tedious, making it difficult for a layman. This is why most borrowers use an online EMI calculator. The calculator is simple to use and is available for free. It will help you figure out the amount you have to pay each month and will help in financial planning.
Benefits of using EMI calculator when applying for a loan
Accurate: The online emi calculator uses a complex mathematical formula to give you an accurate estimate of the EMI amount you will have to pay each month. If you try to calculate it yourself, it could lead to errors and the answer will be inaccurate. With the calculator, you will not have to double check because it will be accurate.
Choose the right loan: Small business loans are available in several forms and when you use an EMI calculator to apply for the loan, you are in a better position to make a decision. You will be able to choose a loan that is an ideal fit for your needs. You will be able to consider the cash flow, monthly outflow and then agree on an EMI amount.
Make financial decisions: Every time you apply for a loan, you start by identifying the purpose of borrowing and then considering the amount of funds you may need. Using an EMI calculator excel will help make the right financial decisions. You will have your budget in front of you and an EMI amount on the calculator, you can now make a decision on whether to go ahead with the loan or not. You will be able to make the right decisions keeping the short term, medium term and long term business goals in mind.
Consider the above-mentioned benefits of using an EMI Calculator before you apply for a small business loan. You can change the inputs in the loan calculator until you are satisfied with the result. It might be difficult to change the loan amount, hence, it is important to keep the tenure in mind. If you want a low EMI, you can increase the tenure and vice versa. It completely depends on your ability to make the repayment on time. Never stretch your budget to make the EMI payment because it could lead to working capital trouble. You can use the calculator and then agree on an EMI amount that is suitable for your business.