Generally, a term loan has a repayment period of 1 to 25 years, depending on the size and purpose of the loan.
Small business seeks term loans to acquire fixed assets primarily and sometimes also as working capital for streamlining cash flow resulting out of seasonal fluctuations or accumulation of receivables.
A business can best use long term loan calculator and EMI calculator for a term loan in excel for the same results. In the latter, you also get the benefit of the amortization chart showing the entire pattern of the loan.
Term loans usually reflect its lifespan, and thus also the determinant of their type.
The formula is handy in determining payment on different types of loans, including business loans. The use of funds does not affect the outcome, but the deviation in repayment standard fixed amortization available through term loan calculator excel file may give differing results. Let us check the formula used to calculate a loan payment.
P = Payment
PV = Present value which is also the original loan amount
R = Rate per period
N = Number of periods.
The criteria differ from lender to lender and the repayment term envisaged for the loan. In banks, the rules and standards are stringently applicable as compared to new age Fintrechs like Lendingkart. Additionally, Fintechs cater for only short term and intermediate-term loans. The criteria enumerated below match that of Lendingkart.
Documentation is integral to any loan proposal. The list of required documents depends a lot on the size and type of loan, other than ownership. The compilation of the list of documents as a summary is in very general terms.
The determination of the actual requirement will be at the time of application and the need of the lender, which may seek specific documents for their records.
Unlike banks, Fintech companies provide a digital platform for the loan application as well as processing. In banks also, there is a provision for online application of loans, but it is equivalent only to the expression of interest.
The actual application proposal, documentation, sanction, and disbursal confine themselves to brick and mortar branches or Credit Hubs. The three simple steps at Lendingkart are:
Rate of interest calculated using the term-loan interest rate calculator is crucial to the cost of the borrowed fund. Besides, other features impact the life of the term loan in general.
Rate of Interest
12% to 24% per annum
One-time 1% to 2% of the loan amount
Up to a maximum of 36 months.
EMI or fortnightly
Since the loans are unsecured, no collateral is required.