Business Loans Made Easy: How EMI Calculator from Poonawalla Fincorp simplifies the process of acquiring Business Loans
Loans are a great enabler for growth, but a badly timed loan, or one, where the business owner hasn't understood all the terms and conditions, or one that wasn't well suited to their business model in the first place, can set a business back by several years.
In a start-up culture which values growth above everything else, existing business owners can feel like they’re being left behind. The pressure to grow, and grow quickly, is immense, and can often lead business owners to bite off more than the business can sustain, leading to likely adverse financial consequences later.
Loans are a great enabler for growth, but a badly timed loan, or one, where the business owner hasn’t understood all the terms and conditions, or one that wasn’t well suited to their business model in the first place, can set a business back by several years as it funnels its earnings away from growth, and into servicing the debt.
To mitigate such an unfortunate scenario, a Business Loan EMI calculator can be an invaluable and empowering tool, allowing businesses to understand the dynamics of their loan interest rate and tenure and the overall composition of the EMI in clearer terms. Most of us, for instance, tend to evaluate loans based on the interest rate alone, but the interest rate alone doesn’t tell the whole story. Why does this happen though?
This is because calculating EMIs for Business Loans (or any loans!) is hard. Here’s the formula which will assist borrowers to understand the nuances of calculating monthly EMIs:
EMI = [P x R x (1+R) ^ N] / [(1+R) ^ (N-1)]
‘P’ denotes the principal amount
‘N’ denotes the tenure of the loan in months
‘R’ denotes the interest rate applicable every month
Now think of all the math involved in working out various scenarios where the borrower explores how long the loan tenure should be, how high the EMI could be, etc. For most of us, that much math can be daunting and complex.
Poonawalla Fincorp recognises this, and in the spirit of good customer service, transparency and good decision-making, they’ve made a free EMI calculator available on their website for its borrowers. Each loan product has its own EMI calculator, so a borrower does not need to make any assumptions or adjust the amount in any way. What a borrower sees, is what a borrower gets.
Why Use an EMI Calculator?
To be precise, an EMI calculator helps a borrower take a more informed and prudent financial decision. There are many ways an EMI calculator helps you navigate the loan decision. Let us look at some of them below.
Understanding the cost of the loan: Your loan comprises of three key elements: the loan amount, the interest rate and the loan tenure. The higher (or lower) the first two elements are, the more costly (or inexpensive) the loan is. When an EMI calculator takes these three elements into account to calculate your loan EMI, a borrower can clearly see what the loan is going to cost him/her in its entirety.
Choosing the right tenure and EMI: The EMI calculator helps the borrower balance the tenure and the EMIs. A longer loan tenure will result in lower EMIs and a higher total interest cost over the life of the loan. On the other hand, a shorter tenure will result in higher EMIs but a lower total interest cost. By using an EMI calculator, borrowers can experiment with different loan tenures and EMI amounts to find the right balance between affordable EMIs and a reasonable total interest cost.
Planning the finances better: It helps the borrower plan their finances better by calculating the monthly instalment amount. Once a borrower knows the monthly outgoing EMIs, they can judiciously plan their cash flows and ensure funds are available on time to service the loan and avoid any late EMI penalties.
Making efficient comparisons: EMI calculators are a great way for you to compare different loan offers extended by various lenders. By making use of the EMI calculator, a borrower can compare the EMIs and total interest costs of different loan offers from different lenders, giving them a holistic picture. The decision will now be made on the total cost of the loan and not just solely based on the interest rate.
The Poonawalla Fincorp Advantage
The best Business Loan products are designed to respond to your business needs, not vice versa. This translates into loan products and loan providers who make the loan process easy, hassle-free and efficient. These loan products also have features such as ease of applying for a loan online, minimal documentation, instant online loan approval and competitive rates.
Of course, Poonawalla Fincorp’s Business Loan does all of the above, further augmenting this by extending loans without the need to pledge collateral/s as security. Additionally, a sizable sanction loan amount of up to ?50 Lakh is provided by Poonawalla Fincorp for Business Loans. Poonawalla Fincorp prides itself on its friendly and agile online loan processing that allows borrowers to upload documents online. Moreover, Poonawalla Fincorp understands that businesses can have several needs, and their loans address a broad range of them – from funding business expansion to capitalising on business opportunities to boosting working capital reserves, to handling short-term mismatches.
The eligibility criteria are also straightforward: the business owner must be at least 24 years old and have a CIBIL score of 700 or above. The business must have a minimum vintage of 2 years, and the annual business turnover should be over ?6 Lakh. One of the most striking features of the Business Loan product of Poonawalla Fincorp is there are no additional charges on foreclosure of the loan, thereby decreasing the overall interest burden of the borrower, by allowing them to make part prepayments during any windfalls.
For business owners, sustainability and growth must necessarily go hand in hand. By allowing for more prudent decision-making and backing that up with customer-friendly policies and processes, Poonawalla Fincorp is facilitating strong, stable businesses whose growth comes from a place of strong decision-making and financial prudence.
Learn more about Poonawalla Fincorp’s Business Loan for Small Businesses, MSMEs and Women here.
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