Business Loan Calculator Myths and Facts

Business Loan Calculator Myths and Facts

Are you a businessman, entrepreneur, professional, or looking to start a new business, expand operations or turn around a dying business? Are you also facing difficulties in arranging funds for your next big move?

Bearing this in mind, a business loan is suitable for those who need funds to enhance business adaptability or profitability. However, as with any other financial decision, taking a business loan involves multiple questions around EMI.

That’s when a business loan EMI calculator comes to your rescue. A loan EMI calculator makes predicting the monthly instalments towards your loan quick and easy. Just insert your loan amount, rate of interest and tenure; the calculator does the EMI calculation job for you. This predictability will aid your financial planning by giving you an estimate within seconds.

Online loan EMI calculator

E = P x r x (1 + r) ^ n / [(1 + r) ^ n – 1]

Here,

  • E – EMI
  • r – Rate of interest
  • n – Number of months/years (tenure of the loan)
  • P – Principal amount

The loan EMI calculator also enables you to tweak the amounts as per your specific requirements to match your pocket. We’ve busted a few most common myths here. Read on.

  1. High-Interest Rate leads to Large Monthly Instalments.

While it may appear logical to link high-interest rates to huge monthly payments, this is rarely the case. To compensate for a high-interest rate, banks also extend the maturity date of a loan. As a result, you’ll have a low EMI. Other factors such as the borrower’s age and income are considered while calculating the EMI.

The quantity of money you can borrow is determined largely by your salary. Remember that the lesser the loan duration, the higher the monthly payment, and vice versa. Borrowers frequently default on their loans due to the high-interest rates, which has an adverse influence on their credit score.

  1. Low-Interest rate means Cheaper Loans.

While a low-interest rate implies a low monthly payment, there are several other factors to consider. A few extra fees may lead to an increase in your monthly EMI payment if they are not taken into account.

Low-interest loans, on the other hand, maybe limited as they require payback over a longer period of time. As a result, while a low-interest rate is undoubtedly important, it is not the only factor to consider.

 

  1. High Credit Score guarantees Loan approval.

Credit scores help financiers make informed decisions about you. On the other hand, a good credit score does not guarantee loan acceptance. Most lenders consider a number of variables before approving a loan, including income, firm turnover, and so on.

Having a low credit rating, on the other hand, does not automatically rule you out of getting a loan.

  1. Personal Loan is always a better choice than Business Loan.

It’s like comparing apples and guavas when it comes to personal and business loans. Business loans, like personal loans, provide capital and need payback; however, the similarities end there. Personal loans are frequently associated with high-interest rates and short repayment periods. The loan amount is low, and it is supposed to cover a single person’s living expenses.

Business loans are the best alternative for individuals looking for a high loan amount, a longer loan period, or a low-interest rate.

  1. Business Loans are hard to get

This is an old urban tale from another era. Small enterprises and startups, as well as existing businesses, are qualified for business loans. The government has introduced several lending programs for small firms and startups. Non-Banking Financial Companies (NBFCs) are always a good option for quick loan approval. Unsecured business loans can be utilized for a variety of purposes.

As a result, you will be able to obtain the funds you require without putting up any collateral. Finally, obtaining approval for a business loan does not take an eternity. Your loan application will be approved quickly if you keep your paperwork organized and provide it on time. A good credit score, a well-organized business plan, and a track record are all important.

  1. Big lenders are the best lenders.

To be realistic, reputable lenders project an image of trustworthiness and dependability. Remember that you are the one looking for money. Consumers now have a wider range of lending options, which is a good thing. Aside from the major NBFCs and banks, a handful of smaller lenders have only recently been established and/or do not yet have a considerable market presence. Because they are almost as dependent on you as you are on them, they are typically more understanding of their circumstances.

Non-bank financial businesses (NBFCs) and online lenders, in addition to banks, offer attractive lending rates. For a variety of applications, there are numerous viable solutions. Working with alternative lenders may also result in lower interest rates, less paperwork, and quicker loan approval.

To sum it up

Business EMI Loan calculator helps you apply for a loan with confidence and also enables you to plan the repayment even before applying for the loan. They are super easy to apply and can be initiated within seconds. So, now that all your myths have been busted make a better-informed business loan selection and take the next plunge to grow your business.

About John

Check Also

6 Cryptocurrencies Beginners Don't Know About

6 Cryptocurrencies Beginners Don’t Know About

There are over 1,700 cryptocurrencies in circulation today. And while Bitcoin is still the most …

Leave a Reply

Your email address will not be published.