Running a business needs consistency and cash. Business is risky and it will need funds from time to time. Whether you want to expand the business or enter a new market, you need funds. There are various types of business loans available in the market today. It is important to access the needs of the business and then apply for a loan. Consider the purpose of borrowing and the amount of funds you need, this will help choose the right loan product.
You will have to repay the loan amount in EMIs over the tenure. An EMI is also known as Equated Monthly Installment and it will be a regular outflow until the entire loan amount is repaid. It is important to use a loan emi calculator before you apply for a business loan. The calculator is available for free online and it is simple to use. You only need to provide the loan amount and tenure to get a quick estimate. You can change the inputs until you reach an optimal output. The calculator will help you make the right borrowing decision.
Importance of using an EMI calculator
Choosing the right loan product: When you use an EMI calculator, you can compare the EMI amount on different loan products. Since different loans have varying rate of interest, you will be in a better position to choose a loan product that fits your needs. It will help ensure that you zero in on the right loan product keeping your business requirements in mind.
Accuracy: If you try to calculate the EMI amount yourself, there could be several mistakes because the formula is complicated. Even a minor mistake can make a huge difference to the amount of EMI and can change your decision. Using Excel does not guarantee accuracy in results. Hence, the calculator is ideal for use because it will give you accurate results and will help you estimate whether you will be capable of making the EMI payment or not. It will also save time and effort.
Better financial planning: The EMI amount will be your regular monthly outflow. Hence, when you are aware of the amount you will have pay on a certain loan amount, it helps with financial planning. You will be able to consider the cash flows and make the right decision. Before you agree on an EMI amount, you need to consider the monthly inflows and outflows. The calculator will help with efficient financial planning in the long term.
Better decision making: Applying for a loan is an important financial decision and it will have a long term impact on the business. The EMI will be your regular monthly outflow and you will have to manage it without fail. With the EMI calculator, you will be able to decide whether you can pay the EMI amount on a specific loan amount. If not, you can reduce the amount of loan and check the EMI. You do not need to visit the physical branch of the lender for this information.
You can use the EMI calculator from the comfort of your home and compare the amount of EMI payable on different loan products. It will help make the right decisions at the right time.