The banking institutions’ EMI facility is fulfilling the customer’s requirements through their effective services. EMI calculators are used to calculate the equated monthly installment paid by the borrower to the lender every month. There have been attempts to analyze customer satisfaction and check the influences of EMI loan service in commercial banks. Business loan takers have higher monthly incomes, and they have taken business loans for purchasing luxury items and vehicles. Mostly the loan borrowers use their source of salary account for frequent repayment of the loan in commercial banks.
The EMI loan payer’s factors like age, gender, educational qualification, occupation, and purpose of availing loans influence business loan by EMI option in the commercial banks. Not just commercial banks, but even small businesses have started offering business loans and EMI benefits.
Facts about business loans & EMI calculators
A business EMI calculator assists borrowers in calculating the precise EMI they’d be paying each month after taking a business loan. This allows them to observe for the loan with self-assurance and additionally permits them to devise the repayment even earlier than making use of the loan.
Certain basics about the loan, such as loan amount, loan tenure, and interest rate, are required to use the EMI calculator. Once these details are entered into the calculator, it calculates the total monthly installment to be paid by the borrower.
Use of a business loan calculator for EMI
- Saves time and effort: It only takes seconds for the applicant to realize the particular loan EMI with the help of the net calculator. The device helps save time and removes the need for bulky guide calculations, which are exceptionally susceptible to errors.
- Financial planning: Knowing the particular loan EMI amount additionally makes it less complicated for the borrowers to plan their budget and repayment. Business owners must have foresight regarding budget, and the net calculator appreciably contributes to the process.
- Evaluate loan tenure and amount: With the calculator’s help, debtors can also look at the EMI for typical tenures and loan amounts. Based on the results, they could then realize the proper mortgage quantity and period for the loan to be taken.
However, there are numerous misconceptions associated with EMI calculators and business loans. Let us look at some of the myths related to EMI calculators and business loans in the segment below.
Myths associated with business loans and EMI calculators
Myth 1: High-interest rate equates to large monthly installment — Logically, higher interest rates would mean higher EMI’s, but in such cases, the banks are willing to increase the duration of the tenure. Hence, the payable EMI will decrease. Factors such as income, age, and family history are crucial in determining the EMI’s.
Myth 2: Business loans are hard to get — This is a diminishing myth. With the help of various government schemes, startups can get business loans easily. It is essential to have a good credit history, a well-setup business, and records of returns to speed the process of a business loan. A borrower must fulfill the business loans eligibility criteria for loan request submissions. A business loan requires submitting the following documents for processing the request.
- Previous year’s GST statement.
- Bank statement of past 6-months.
- Address proof, entity, and identity-related documents.
- Previous 2-years income tax return statements, profit loss statement, and balance sheet.
- All financial records of the business.
- Business ownership proof and business evidence continuity.
Myth 3: Big lenders are the best lenders — Even though big lenders in most cases are considered to be the best, it is important to research companies. Apart from big banks and organisations, smaller lenders have established themselves well and offer flexible terms and conditions. They often provide customised solutions for their clients depending on their relationship. NBFCs and digital lenders offer attractive rates to suit all kinds of requests.
Myth 4: Low-interest rates mean cheaper loans — While a low-interest fee implies that you’ll need to pay a low-interest amount, numerous elements are involved. There are probably a few hidden costs that ought to increase your EMI amount. Low-interest loans also are frequently rigid in a manner that you may need to pay for an extended tenure. Hence, while a low-interest fee is essential, it isn’t always the only aspect to consider.
Myth 5: A business loan fulfils limited business needs — You can use a business loan for nearly any business requirement, regardless of how massive or small. If your business includes heavy equipment and machinery, you may choose a mortgage for business machinery. Whether you need to cover your organisation’s short-time period expenditure and numerous intermittent charges or need to control your inventory, a business loan can help.
Myth 6: Personal loans are better than business loans — This is like evaluating apples and oranges. Both personal loans and business loans offer you cash and ought to be repaid; however, that’s where the similarity ends. Personal loans regularly have very high interest charges and small reimbursement tenure. The loan quantity is likewise paltry, aimed at individual needs. Business loans are the answer for a person seeking excessive loan quantity with lengthy loan tenure and low-interest charges. So, all of it depends on your needs.
It is human to believe in myths about business loans, but knowing reliable sources of loans can help. Reading the terms and conditions of business loans and EMIs can help in better decision-making. It is also recommended to consult experts who can guide you through the processes of business loans. The myth-busting in this article would also contribute towards better judgements about business loans and EMI calculators.