How does the Money View Business Loan EMI Calculator Work
Every loan, regardless of the type of loan it is, needs to be repaid
through EMIs or Equated Monthly Installments. This amount is
determined by the principal amount borrowed, the interest rate
charged by the lender, as well as the repayment term was chosen by
you, the borrower.
Knowing how much EMI to pay will help you plan out your finances
However, these calculations are error-prone if done manually which
can potentially derail your finances. Therefore, in order to make
the entire process hassle-free, the Money View Business Loan EMI
calculator calculates and provides the EMI amount you will have to
pay along with the amortization schedule (more on this below) in an
instant. In order to use this calculator, follow the steps given
• Enter the principal amount that you wish to
borrow. This number can be adjusted by using the slider
• Provide the interest rate charged
• Lastly, enter the repayment term you wish to
Instantly, our calculator will let you know the EMI that you will
have to pay.
Business Loan EMI Calculation Formula
The formula for calculating gold loan EMI is as follows:
P x R x (1+R)N / [(1+R)N-1]
• P stands for Principal Amount that is borrowed.
• R stands for Rate of interest imposed.
• N stands for Number or tenure in number of months.
For example, if Rs. 15,00,000 is the amount borrowed (P), 18% is the
rate of interest imposed (R), and the 36 months is the tenure (n),
the EMI to be paid using the above formula will be:
15,00,000 x 0.015 x (1+0.015)36 /
[(1+0.015)36-1] = Rs. 54,229 (per month)
The rate of interest (R) is calculated monthly i.e. it is calculated
as (Annual Rate of interest/12/100) in this case (18/12/100 = 0.015)
Business Loan Amortization Schedule
Apart from the EMI amount, it is important to also know your
amortization schedule. This is essentially a table that shows the
amount of principal and interest left in each payment until the loan
is fully repaid.
For eg. in the case mentioned above, for a principal amount of
Rs.15,00,000 with interest rate and repayment tenure being 18% and
36 months respectively, the EMI amount based on the formula is Rs.
54,229 per month. The table below illustrates the amortization
schedule of this loan in detail.
Factors Affecting Business Loan Interest Rates
Given below are some of the most important factors that impact
business loan interest rates -
If you have a high credit score then you will be able to avail of a
loan at competitive interest rates. This is because a high credit
score indicates good creditworthiness and therefore the risk of
default is less.
The riskier the business, the higher is the rate of interest
charged. If the business you wish to undertake guarantees profits
early with less risk then you can avail of the loan at a lower rate
of interest as the chances of you defaulting on the loan payment in
such circumstances is low.
While entrepreneurs do not need an age limit, those with more
business experience tend to avail loans at a lower interest rate.
This is again because they may be better suited to dealing with the
unpredictable nature of businesses and hence reduces the risk for
• Loan Amount and Repayment Tenure
As is the case with every other loan, the amount availed and
repayment tenure chosen will impact the rate of interest. The low
loan amount and a shorter repayment period will attract lower rates
of interest as the perceived risk for defaulting is low.