💼 Business Loan Calculator

Business Loan EMI Calculator

​To successfully build and expand a business, securing adequate capital is essential. Business loans serve as a reliable solution to meet various financial needs, from scaling operations to managing cash flow.​

💼 Why Consider a Business Loan?

Business loans offer several advantages that can support your company’s growth and stability:​

• Build Creditworthiness: Timely repayments can enhance your business credit score, facilitating future financing.
• Access to Capital: Provides the necessary funds for expansion, equipment purchases, or entering new markets. ​
• Flexible Terms: Many lenders offer customizable repayment plans to align with your business’s cash flow.
• ​Retain Ownership: Unlike equity financing, loans allow you to maintain full control over your business. ​Small Business Administration

How to Use the Business Loan EMI Calculator?

1. Choose the amount that you need for your business
2. Enter the interest rate offered depending on your business type
3. Select a convenient loan tenure
4. Press the ‘Calculate’ button.

🧮 EMI Calculation Formula Explained

To calculate your Equated Monthly Installment (EMI), you can use the following formula:​

Where:

• P = Principal loan amount
• R = Monthly interest rate (annual interest rate divided by 12)
• N = Total number of monthly installments (loan tenure in months)​

This formula calculates the fixed monthly payment required to repay both the principal and interest over the loan tenure. It ensures that each installment covers the interest for the period and a portion of the principal, resulting in a consistent payment schedule throughout the loan duration.​

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📌 Example Calculation

Let’s Ravi has taken a loan of ₹1,00,000 at an annual interest rate of 8% for a tenure of 5 years (60 months).

First, convert the annual interest rate to a monthly rate:

• Annual Interest Rate = 8%
• Monthly Interest Rate (R) = 8% / 12 = 0.6667% = 0.006667​

Now, plug the values into the EMI formula:

• P = ₹1,00,000
• R = 0.006667
• N = 60​

EMI = [100000 × 0.006667 × (1 + 0.006667)^60] / [(1 + 0.006667)^60 – 1]​

Calculating this gives an EMI of approximately ₹2,027.64 per month.

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