# EMI Calculators & Business Loans – Facts & Myths

EMI Calculators & Business Loans – Facts & Myths

EMI, Equated Monthly Instalment, refers to the amount paid by the borrower every month towards the repayment of a loan. It is the reflection of the loan amount that needs to be repaid by the borrower to the financial institution within the decided loan tenure along with the interest cost.

EMI essentially has two parts – one is the principal amount of the loan and the other one is the interest cost charged on a monthly basis. An EMI calculator is an online tool that helps in calculating the EMI by simply entering details such as principal amount, loan tenure, and the interest rate.

Business requires money from time to time to invest in the renovation of the office, business expansion, or to start a new product line to grow business. In situations like these, a business loan comes handy for all the business owners as they provide financial assistance to the businesses to grow and compete their competitors.

A business owner can avail a loan for business for 12 months, 18 months, or 24 months. Besides, there are long-term loans available in the market as well. He can also choose to avail a business loan without collateral. The major benefit of availing this type of loan is that the business owner is not required to hypothecate any collateral. In addition, the lenders offering collateral-free business loans have fast processing and offer loans at low-interest rates.

## How EMI Calculator Works?

As said above, the principal amount and interest are the major two components of an EMI. Both these components are paid off in the EMI. By using an EMI calculator, the EMI can be easily determined before availing a loan. The following is the formula that a business loan EMI calculator uses to calculate EMI:

EMI = [P x R x (1+R) ^N-1]

Where,

EMI = equated monthly instalment

P = principal amount of the loan

R = rate of the interest at which the loan is availed

N = the tenure for which the loan is availed (should be in months)

There are several myths associated with business loans that often tend to confuse applicants. Here, we are busting a few myths to help make a wise decision:

### Myth 1: Only Bank Business Loans are available

Many business owners think that availing a business is a tough task. And when they are asked about where are they availing it from, they answer bank. But the financial market has changed lately with many NBFCs and online lenders coming up who provide business loans at much better terms and conditions. In true sense, they are giving good competition to the banks as they come with a host of benefits. Besides, they offer an instant business loan.

### Myth 2: Small Amount Loan is not available

There is a general myth that small amount of business loans are not available in the market. Well, it certainly is a myth as the alternative lenders, such as NBFCs and online lenders, offer a small amount of business loans of just Rs. 1 lakh. Besides, the government is also coming with many MSME loan schemes, such as MUDRA loan, through which small business owners can avail loans at comparatively lower interest rates and easy terms and conditions.

### Myth 3: High Credit Score is a must

Well, we don’t say that a credit score is not required to avail a business loan. It is a must to apply for a loan and get it approved. However, a high credit score is not a must. The alternative funders have their own credit evaluation process that they employ to evaluate the borrower’s creditworthiness holistically. Besides, they also take into consideration the cash flow, income tax return, and other financial documents.

### Myth 4: Availing a Business Loan is a long Process

Gone are the days when a business owner had to wait for weeks and months to get his application processed and the amount disbursed. The alternate lenders have changed this scenario completely. They have streamlined the process and made it faster. All it takes is 3-4 days from the approval to disbursal of funds. Also, easy eligibility makes it easy for borrowers to avail a loan.

### Myth 5: Online Lenders are Unsafe

Many borrowers think that online lenders and overall online transactions are unsafe. However, new technologies have made the platform secure and trustworthy. The borrowers can check the credentials of the lenders, their terms and condition, and interest rates online.

As the lending process is being digitised, it is becoming easier and comfortable for the business owners to get financial assistance in terms of a loan. The borrowers are now able to find the best business loan product, lender, and compare rates online to make a sound choice. Besides, the Business Loan EMI calculator is also an online facility that helps the borrower to calculate EMI effortlessly.