Many business owners and entrepreneurs avail of business loans for short or long tenures depending on their requirements and repayment capacity. Commercial loans are mostly taken for business expansion, purchasing machinery, plant set-up, or acquiring commercial property. Unlike personal loans, commercial property loans are secured loans with the underlying property as collateral to the financial institution. The interest rate, and the loan amount to be borrowed depend on the credit score and financial stability of the borrower.
For any business owner to know the EMI and other applicable variables, as per the loan tenure, is doubly important. Thus, a commercial property loan EMI calculator is necessary to get the math right and avoid paying extra interest.
What is a Commercial Property Loan EMI Calculator?
An EMI or Equated Monthly Instalment is a pre-decided amount to be paid by the borrower to clear an outstanding loan with or without an interest charge. The tenure is fixed for repayment, and the total amount includes the principal amount with the monthly interest to be paid.
When a borrower seeks a commercial property loan, they attach a business or commercial estate as collateral. The commercial property loan EMI calculator is helpful to borrowers for evaluating their monthly instalments towards the loan.
Apart from the quick calculation of instalments, the commercial loan EMI calculator has various benefits:
It saves time for the user by evaluating the EMI amount within seconds of capturing the data. It requires a few details to be filled in manually, and with a single click, the interest amount and total repayment amount will be calculated.
- Financial Planning
Calculating the EMI amounts earlier can help the borrower pre-plan their investments and expenses based on their monthly EMI amounts derived from the EMI calculator.
- Multiple Tenures
Borrowers can calculate the interest payment and total repayment amount for a certain tenure. They can also compare the EMI amounts by changing the interest rate or the loan tenure with the EMI calculator.
- Accurate Data
Any manual mathematical calculations have the possibility of errors and mistakes by an individual. Unlike humans, computer systems are less likely to miscalculate and show numerical errors. The data provided by online EMI calculators are more accurate with almost accurate answers.
How to use the Commercial Property Loan EMI Calculator?
Manual calculation of EMIs according to the interest rate and loan amount can be a very complex process and delay operations. Hence, institutions offer an online commercial property loan EMI calculator for clients to evaluate EMI amount within seconds. Borrowers can also get more information on home loan interest rates today by downloading the official mobile phone application of the lending institutions.
There are certain basics to understand before opting for a commercial property Loan EMI Calculator. The main components in any kind of EMI calculation are the total loan amount, the rate of interest charged, and the loan tenure for repayment.
The mathematical formula to calculate Commercial Loan EMI is:
E = P x R x [(1+R) / N ] / [(1+R) / N-1]
In the formula, E stands for EMI (Equated Monthly Instalment), P stands for the Principal amount or the Loan amount, R stands for the rate of interest implied and N stands for the number of months or the loan tenure in months.
For instance, the borrowing firm is seeking a commercial property loan of Rs. 30,00,000/-, with an interest rate of 9% per annum for 20 years.
The steps to use an online commercial property loan EMI calculator are as follows:
- Enter the official website of the institutions offering the EMI calculator facility.
- Enter the approximate or exact amount to apply for the loan (Rs. 30,00,000/-).
- Enter the rate of interest on the loan offered by the financial institution (9% per annum).
- Select the tenure or the number of months for repayment of the loan amount (20 years x 12 months = 240).
Once the details are entered correctly, after clicking the ‘generate EMI’ or ‘schedule EMI’ option, the EMI calculator will evaluate your approximate EMI amount.
The loan EMI calculators offered online and on mobile phone applications are free tools that can calculate the monthly instalments of the loan instantly for reference. It’s one of the easiest financial tools to be used by firms before applying for a loan.
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