Business Loan EMI Calculator

Considering a business loan but unsure about the monthly repayment amount or EMI you will incur? SMFG India Credit offers a user-friendly online business loan EMI calculator to help you estimate your EMIs. By entering essential details such as the loan amount, interest rate, and tenure, you can get a realistic picture of your monthly business loan EMIs.

Our business loan EMI calculator not only saves you the time and effort required in manual calculations but also helps in making informed decisions by offering a clear picture of the loan's impact on the business cash flow. This helps you assess your business’s repayment capacity, ensuring you choose the loan amount and tenure that can align with your financial goals and operational requirements. Additionally, you can also use our business loan eligibility calculator to get an estimate of the maximum loan amount you may be able to borrow. These valuable insights will further help you make informed decisions about your business finance options.

Let’s explore how to use a business loan calculator for EMIs, how interest is calculated on a business loan, and the factors that affect business loan EMIs.

How to use Business Loan EMI Calculator

Our business loan EMI calculator is super easy to use. All you need to do is enter the tenure, rate of interest, and total loan amount. With these three quick steps, you can determine the EMI amount in seconds. Here is a step-by-step guide for using the business loan EMI calculator:

1. Enter the Total Loan Amount
   Use the slider to select the total loan amount you wish to borrow for your business. The loan amount is the principal that will be used to calculate the monthly business loan EMI and is one of the biggest factors that affect the EMI amount.
2. Enter the Interest Rate
   Enter the interest rate that is comfortable for your current business profile. However, the final interest rate will be determined by SMFG India Credit depending on several factors such as your location, net profit after taxes, business stability, and so on.
3. Select the Loan Tenure
   Choose the tenure for the loan that best suits your business needs and repayment capacity. Longer tenures generally lead to lower monthly EMIs, making your budget planning easier, but might result in higher costs in terms of interest.
4. Calculate the EMI

   After you hit the submit button, your business loan EMI amount will be generated instantly. You can try different inputs on the loan amounts, interest rates, and tenures to arrive at an option that best suits your financial needs and business goals.

   As your trusted lending partner, we are always looking to improve what we offer as services and solutions. The SMFG India Credit business loan EMI calculator is simple but is extremely helpful in making the best of every business opportunity with the right financial estimates and plan each time. ter you hit the submit button, your EMI amount is generated.

How is Business Loan EMI Calculated?

The business loan EMI is calculated based on 3 main factors:

• Your loan amount
• The interest rate quoted at the time of disbursal
• The total tenure of the loan

The business loan EMI calculation can either be done through an online calculator or by using the EMI calculation formula.

1. Using the Business Loan EMI Calculator
   By using an online business loan EMI calculator, you can arrive at a realistic figure of your total monthly obligation, which can help you to decide on the loan tenure and the loan amount beforehand.
2. Using the EMI Calculation Formula

   The following is the business loan EMI calculation formula:

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

   Where,

   • P = Loan Amount
   • R = Interest Rate
   • n= Repayment Period

EMI for Various Loan Tenures

Let us understand this with an example. For a loan amount of INR 30,00,000 taken for 4 years at an interest rate of 13% per annum, the EMI turns out to be INR 80,482 using the above formula. Similarly, let us see the EMI for the same loan amount and interest rate over a period of 1, 2, and 3 years.

Disclaimer: These are approximate EMI calculations, actual numbers may vary. 

The business loan EMI calculator is a very useful tool for financial planning. By exploring different scenarios, it helps to plan your finances and make better financial decisions.

How Is Interest Calculated on a Business Loan?

Let’s take a look at the steps for calculating business loan interest:

1. Understand the Interest Rate
   The interest rate is the amount of charge that the lender charges for the amount lent. It is expressed as a percentage of the principal, which is the total amount of money borrowed.
2. Identify the Types of Interest Rates

   Two types of interest rates are usually quoted to the borrower:

   • Nominal Interest Rate: The annual rate of interest charged by the lender.
   • APR (Annual Percentage Rate): The annual total cost of the loan, including interest cost, processing fee, administrative fee, and other costs.
3. Recognize the Effective Interest Rate
   Finally, the effective interest rate reflects the true cost of the loan, considering compounding. The formula for the effective interest rate is:
   Effective Interest Rate = (1 + r)^n - 1, where r is the periodic rate of interest.

What are the Factors that affect Business Loan EMI?

The calculation of business loan EMI amount is affected by the following factors:

Loan Amount: It is the primary factor and the base for calculating the monthly loan instalment amount. With an increase in the loan amount, the EMI amount also tends to increase proportionally.

Rate of Interest: It is a very important component and is determined based on your income, credit score, the financial statement of the business, and repayment capability.

Loan Tenure: The loan tenure has the maximum impact on the EMI amount and it is the time taken to repay the entire loan amount including interest. An increase in tenure will result in low EMI amount, but will also increase the interest component.