EMI Calculators and Business Loans – Facts and Myths

EMI Calculators and Loans – Facts and Myths

When you search the internet for getting a small business loan for your enterprise, a number of business loan EMI calculators and loan offerings pop up in your search results. For a person applying for their first commercial loan, it might get confusing. This post helps you in understanding the formula used by an online EMI calculator to calculate the monthly instalment for your MSME loan. Furthermore, we try to dispel some common myths associated with business loans.

How EMI Calculators Work?

EMI means Equated Monthly Instalment. It is basically the amount you pay every month until the loan is paid in full to the lending institution. Every EMI has two components, principal and interest. Both components are paid off with every consecutive EMI payment.

Here is the formula used for calculating an EMI –

emi calculators formula

Using the formula, you can self determine your monthly EMI on a business loan. Lending institutions such as banks and NBFCs charge a minimum processing fees and other charges for disbursal which are generally deducted from your total loan amount.

Benefits of Business Loans

Unsecured business loans let businesses fund their exigencies and can be used for expansion or to meet working capital requirements. Also, unsecured business loans are one of the quickest ways to raise liquid capital without putting up a collateral or security.

NBFCs such as Lendingkart offer quick renewal of loans upon repayment without any extra charge, which means you can easily maintain your working capital in-flow indefinitely.

Myths Associated with Small Business Loans

There are several rumours and myths that float around the web and in business circles about getting a business loan from an NBFC or banks. However, not everything you see or hear online is true.

Myth 1: Getting a business is the hardest thing to do

Obtaining a business loan is not an insurmountable task. You can reduce a lot of frustration by doing some due diligence before applying for a small business loan. With your documents and eligibility requirements in order, you can easily get an unsecured business loan from an NBFC or a bank.

Lendingkart promises loan amount disbursals within 3 days of document verification. What’s more? The process is completely online. You can simply login on the Lendingkart website or mobile app to apply for a business loan.

Myth 2: A Perfect Credit Score is Required for Getting a Business Loan

While your CIBIL score will be taken into account by the lending agency, it does not have to be perfect. A good CIBIL score that is more than 700 is mostly enough to qualify for a business loan. There are a number of other factors such as your business’s health, years of operation and profit margins, which are considered by the lenders.

Myth 3: The Best Way for Getting a Business Loan is Through a Bank

Well, this is no longer true because banks have a very narrow product portfolio considering the flexible credit requirements of modern MSMEs. Therefore, Non Banking Financial Companies are a much better choice for availing quick working capital loans and unsecured business loans.

Along with fast processing times for MSME loans, NBFCs also offer the ease of renewal and waiver of pre-closure charges.

Concluding Thoughts

As the digital reforms to our economy take off, getting online finance for business is going to become even more easier. At Lendingkart, we have already limited the process of getting business loans to a few simple steps. You can use our online EMI calculator to plan and manage your monthly instalments as well.

To apply for a business loan, click here.

Lendingkart offers Attractive Interest Rates for SME Loans

Small and medium enterprises in India are growing at an exponential rate. The Indian Government has launched several schemes for their benefit. Furthermore, the introduction of GST and online portals has increased the ease of doing business in India. You can now quickly gain approvals for new projects or much needed expansions. However, to get things started you will need ready capital for investment, and at Lendingkart Finance, we do just that for you. Lendingkart offers attractive interest rates in the range of 18-27% for short term SME loans.

With Lendingkart’s unsecured business loans, you can get small-ticket short term investment on-the-go. We have made the process completely online so that you can monitor the progress of your application in real-time. Lendingkart loans are approved for businesses having profitability in 2 previous financial years with a minimum annual turnover of Rs. 6,00,000. Other factors such as applicant’s age, income tax returns, and business stability are also used in determining the loan eligibility.

Easily Calculate Your EMIs

We offer a business loan EMI calculator which you can use to get an idea of EMI amounts you will be paying. The EMI is calculated based on the Lendingkart interest rate offered to you, the loan amount and tenure. For example, the EMI payable for a one lakh rupee loan, taken for 12-months at 18% interest per annum, will be Rs. 9,168. In similar scenario, if the interest rate is 27% p.a., then the EMI will be Rs. 9,602.

Attractive interest rates for SME loans. Find yours through the EMI Calculator

 

Needless to say, the higher the amount of your loan, the higher the amount of your EMI. The EMI calculator also helps you in budgeting and adjusting your finances to meet your EMI payment schedules.

The benefits of taking a business loan from Lendingkart

There are several benefits offered by Lendingkart in comparison to banks providing similar loans.

Lendingkart Interest Rates:

Applying for an SME Loan

Terms

Attractive Interest Rate 18% to 27%*
One time Processing Charge 2% of the Loan amount
Loan Duration Minimum: 1 month, Maximum: 1 year
Loan Amount (min to max.) Rs. 50,000 to 1 Crore
Part Prepayment Charges NA
Pre-closure Charges Nil**

*based on your business’s health and credit score

**Pre-closures are only allowed after the first EMI has been paid in full

We have a proprietary method of calculating interest rates which evaluates your loan application using advanced analytics. By enabling technical inputs and outputs we have made the process of calculating interest rates faster and more accurate. The attractive interest rates are calculated by factoring in several things listed below and are different for every partner SME.

  1. Loan Amount: The amount that you apply for, pending approval, counts towards deciding the interest rate. Generally, the higher the amount of loan, higher the possibility of a lesser interest rate from Lendingkart.
  2. CIBIL Ranking: If your CIBIL score and history are good, the interest rate we charge will be lower and vice versa.
  3. Balance Sheet: If you are earning good margins, we will take that in consideration while deciding interest rates on your loan.
  4. Age of Business: For long running enterprises, we offer special discounted SME loan rates.

Business Friendly Loan Approval and Pre-closure Charges

We do not believe in charging extraneous charges and fees from our customers. That’s why we have one of the friendliest pre-closure policies – there are no pre-closure charges. After paying the first EMI, you can prepay the full loan amount, anytime. Added with the benefit of attractive interest rates, it is a great way to finance any short term business requirement.

Also, we only charge 2% of the loan amount plus service tax as processing fee. It’s a one-time fee which you don’t have to pay if you choose to reapply for the same loan amount upon closing.

Minimum documentation and turnaround time

When applying for a business loan with Lendingkart, you have to submit only a handful of documents. And we process every loan application within 3 days of document verification.

Documents required by us are:

  1. Address proof (Aadhar Card, Voter ID, Bank Statement, Proof of registration, etc.)
  2. Identity Proof (Passport, Aadhar Card, Driving Licence, PAN, etc.)
  3. Proof of Business (PAN, GST Registration, Trade License, Registration Certificate issued by RBI or SEBI).
  4. Copy of PAN card and Income Tax Returns for last 24 months.
  5. Bank Statement of last 12 months.

To know more about applying for a business loan with Lendingkart, head over to our website and sign-up for a free account.

Small Business Loans – Why and Why Not

When it comes to financials that concern your organization’s growth and prosperity, you would never want to take a chance, would you? Additionally, when it comes to your personal life, you’d always want a steady flow of income and a safety net to secure your and your family’s future as well. This brings us to a rather peculiar scenario of growth prospects. Addressing the elephant in the room, we would need to look at the importance of business loans and the ways in which one should be using them best. Business loans, if taken at the right point of time can further an organization’s reach and scope in a broad manner. On the flipside, taking a business loan without having a plan for progress in mind can be more of a liability than an asset. So, what points should you focus on, as a small business owner, before going in for a working capital loan? There are a few key questions that you should ask yourself before you decide on a business loan – Continue reading