Gone are the days when we had to sit with a financial advisor for hours to get a loan calculation right. With the advent of technology, computing loan EMIs has become much easier with the Term Loan EMI Calculator. This instrument has turned out to be a financial boon for businesses, who can now quickly determine the loan amount along with the interest rates and monthly EMIs.
A term loan is a lump sum that the borrower can use to finance a specific requirement and settle in EMIs over a pre-determined period. Business owners often use term loans to finance their businesses, meet working capital needs, and buy equipment and other assets. With the calculations now done in real-time, entrepreneurs can quickly assess the loan amount they can avail of, and plan their finances accordingly.
How Does the Term Loan EMI Calculator Work?
A Term Loan EMI Calculator calculates the Equated Monthly Installment (EMI) payable for a particular loan on the basis of the loan amount, the interest rates, and the tenure of the loan.
Here’s how it works:
Loan Amount: The total amount borrowed.
Interest Rate: The interest rate for the loan, usually shown as a percentage
Loan Tenure: The time period or the number of years for which the loan amount is taken.
Using the loan amount, interest rate, and the loan tenure, the calculator determines the EMI applicable on the loan.
The term loan calculator also provides business owners with a detailed schedule of the repayment. The schedule includes the interest payable per installment, as well as the principal amount that will be paid each month. It is important to remember that while calculating EMIs, lenders take the principal and interest rates into account. The principal is the total amount borrowed, while the interest is the fee charged by the financial institution to provide the loan.
Benefits of Using a Term Loan Calculator:
1. Accuracy:
The EMI Calculator works out EMI amounts accurately, providing precise calculations to help entrepreneurs determine their financial viability.
2. Convenience:
Business owners can use the tool at any time from anywhere, and avoid the inconvenience of going to their respective lenders to calculate this.
3. Saves Time:
With the calculator’s real-time calculating abilities, business owners do not have to spend time on manual EMI calculations, freeing up their time to focus on other important aspects of their business.
4. Aids Financial Planning:
With accurate calculations and repayment schedules, entrepreneurs can plan their finances better and avoid any unexpected financial expenses.
The Impact of Interest Rates on EMIs
Interest rates play a significant role in determining the EMI. The higher the rate of interest, the higher your monthly installment. Hence, it’s essential to choose a lender offering lower interest rates for ensuring that you’re paying a comfortable EMI amount across the tenure of the loan. Market conditions tend to fluctuate, causing the interest rates to vary from time to time. This means business owners must be vigilant in choosing a lender offering the best interest rates.
Business Loan Calculator: How is it Different from Term Loan Calculator?
Business loans can be used for various purposes such as working capital, loan consolidation, acquiring new machinery and assets, or for expansion of the business. Like any other loan, a business loan involves payment of interest and clearing EMIs across the loan’s tenure. A Business Loan Calculator helps entrepreneurs in computing the EMI payable on the loan.
While the term loan calculator is primarily meant for loan repayments, a business loan calculator is tailored to help entrepreneurs calculate their EMI payments on a business loan per the tenure of the loan.
Conclusion
Term Loan EMI Calculators are powerful tools that have become essential in today’s world of financing. It helps entrepreneurs determine their EMIs accurately and plan their finances for the future. The information derived from the calculator can aid entrepreneurs to assess whether taking a loan is a viable option and can also help identify the best lender for their borrowing needs.
In conclusion, if you’re looking for a budget-friendly loan, use a term loan calculator to calculate the EMIs payable and help plan your finances better. Whether for personal or business reasons, a loan can be made manageable with the use of a term loan calculator.
So, the next time you consider a loan, do not hesitate to use a term loan calculator to streamline your calculations and ensure that loan repayment schedules are clearly defined from the outset.