A loan is an amount of money borrowed and should be paid back with interest. There are two parties involved here. One is the lender, while the other is the borrower. To make it simpler, one who gives the money is the lender. On the other hand, one who takes the money is the borrower.
Can the loan be borrowed for free?
The lender gives money to the borrower on an interest. It means that the borrower pays a certain amount over and above the principal amount that he has borrowed. The extra amount, the lender gets paid acts as a privilege for the use of his money is known as interest.
Duration of the payable interest
The interest can be due monthly, quarterly (every three months) or annually (at the end of the year), depending upon the period for which there is an effective use of money.
Who earns and who pays the interest?
The borrower of the loan pays the interest, while the lender earns the interest. You can say that one is at the giving end and the other at the receiving end.
Who gives loans?
You can get loans from financial institutions, like banks and various NBFCs (Non-banking Finance Companies)like Lending Kart. People borrow money from private individuals too.
Types of loans
You can avail of 6 types of loans. They are –
Personal loans, which are unsecured and for small amounts. Their rates of interest are higher, though than the secured loan.
Cash Advances are for ridiculously small amounts and have an extremely high rate of interest.
Beneficial student loans. They are available for significant amounts at a reasonable rate of interest. Students can repay these loans even after their studies.
Long-term loans like the Mortgage loans fall in the category of secured loans with a low rate of interest, which is tax-deductible.
Home Equity loans also have a low rate of interest, which is tax-deductible. They are often called ‘Lines of Credit.’
Small business loans, popularly known as start-up loans, are provided against the pledging of personal items. They fall into the category of secure loans.
Calculation of the loans and their interests
Calculation of monthly payments or EMIs considers the amount of loan, interest rate, and the term or duration of the loan. Also, the calculation of the loan pay-down requires deducting the principal amount of loan from each of the monthly payments from the loan balance.Ø Let us now look at the “Machinery loan EMI calculator.”
Machinery loan or an Equipment loan
Such loans are availed when either there is a purchase of new machinery or a repair to old equipment. In both cases, however, there is an increase in productivity, thus improving the business.
Machinery or Equipment loan amount
The loan amount varies on the type of machinery purchased – it’s size, new or old, or second-hand. It also depends on its life-time value.
Loan interest rates
The interest rates vary from 2% to 20%. They depend on the credit score of the loan applicant as well as the time for which he has been into the business—higher the credit score, the lower the interest rates.
Repayment of the loan
Equated monthly installments or the EMIs can repay machinery loans. An EMI is a small fixed amount to be paid monthly for the whole tenure for which the loan has been taken. It comprises of the principal loan amount plus the interest accumulated on it.EMI is the simplest and easiest way for the loan repayment. It doesn’t cause a burden on the monthly income while the loan is being repaid.
Machinery loan EMI calculator
EMIs can now be calculated easily by using the machinery finance calculator and that too before applying for the loan.
Machinery loan EMI calculator – explained
It is also known as an equipment lease payment calculator or heavy equipment loan calculator. It is an online calculator that helps in an instant evaluation of monthly installments or EMIs.
Advantages of using machinery loan EMI calculator
An EMI calculator is highly beneficial:
An estimate of EMI helps in deciding the loan amount, also considering the loan repayment ability
This estimated EMI helps in the selection of loan duration
It also helps in managing finances
Once the EMI is estimated, the general cash flow and short-term monetary needs of a business are well-managed
Working of an EMI calculator
Like all calculators, the machinery loan EMI calculator has three variables to be entered into it.
Total loan amount to be procured
The rate of interest
The tenure of the loan
Formula used for the calculation
E = P * r*(1+r)^n / ((1+r) ^n – 1)Where,‘E’ stands for EMIs‘P’ is the principal loan amount to be procured‘R’ means the rate of interest to be payable on the loan amount‘N’ stands for the duration or tenure of the loan.
The Eligibility Criteria:
The Check your eligibility, produces the following list of eligibility criteria:
The age of the applicant must be between 25 to 55 years in order to apply for a business loan.
The applicant must be the owner of his business, which should be running for a minimum of 3 years.
The applicant must have filed the Income Tax Returns for the company for a minimum of 1 year.
Documents Required for a business loan:
The documentation requirements for business loans are minimalistic. Our representatives will take care of the whole process once you hand-over the documents to them.
Identity proof – Applicants will be required to provide identification proofs with KYC documents like PAN card, Voter ID, Passport, Aadhar Card, or any other valid government document.
Address proof – In addition to the KYC documents, passport, telephone bill, electricity bill, ration card or any other document, which can be used as an eligible document towards applying for a business loan is required.
Financial documents – Copy of Income-tax return filed for a minimum of 1 year, A bank statement for the last six months, and an audited copy of Balance Sheet & Profit and Loss Statement for the previous two years.
Business ownership proof – Documents for various business profiles are different. The loan applicant is required to submit the necessary documents matching his business profile.
ConclusionA machinery loan EMI calculator is amazingly simple to use. With its accurate results, one can be at ease regarding the loan and how to go about the whole process.Make a machine loan EMI calculator your friend for life. Nothing is more accurate than a machine loan EMI calculator.