business loan calculator

Business Loan Calculator – Calculate your business loan EMI, interest rates by various banks, eligibility criteria,  application process, Document required to apply in India

What is Business Loan Calculator?

When one takes a business loan, a natural question that comes to mind is how much the EMI would (Equated Monthly Installment) be that one has to pay back to the bank every month. Business Loan Calculator helps you in calculating your monthly EMI at your fingertips.

How to use Business Loan Calculator?

Once you find the Business Loan Calculator, To calculate the amount of Loan EMI, you need to put the following inputs in the Business Loan Calculator:

  • Loan Amount – The principal amount borrowed from the bank or financial institution is known as the loan amount.
  • Interest Rate – Interest rate can be either fixed or floating.
  • Loan tenure – Is the time over which you choose to repay the loan.

The result will be your EMI, the total interest you’ll be paying and the total amount you’ll be paying by the end.

Benefits of Business Loan Calculator?

  •  Fast
  • Simple
  • Convenient
  • Estimate your monthly expenses and have a healthy financial plan

Why should I use Business Loan Calculator?

The simplest answer is that it’s fast and it’s convenient. This means that you can do multiple calculations in minutes where such calculations many take longer were you to sit down with a pen and paper. These calculators are also super accurate so it eliminates the possibility of errors in calculations, provided you provide accurate data.

Components of Business Loan Calculator?

  1. Amount of Loan to calculate Business Loan EMI
  2. Loan term (months or years) to calculate Loan EMI
  3. Rate of interest (percentage)  to calculate Loan EMI

Will Banks Business Loan Calculator?

Yes. These days most, if not all, banks have Business Loan Calculator, specific to various loans, available on their websites.

Business Loan Calculator Eligibility

Business Loan eligibility and  interest rate depends upon following factors –

  • Loan amount: Generally, banks offer lower interest rates for higher amount.
  • Your Income : Higher Income bracket individuals are offered Business Loans at lower interest rates. Business Loan interest rate of the bank varies with your net monthly income.
  • Relationship with the Bank: Every bank offers special rates, offers and charges to the existing account holders of the bank. Those who have managed their accounts and made all the payments on time in past will get benefit of low Business Loan interest rate.
  • Repayment Capacity: Before giving loan to the borrower, every bank checks the repayment capacity of the borrower. Bank verifies the repayment capacity of the customer through CIBIL score or credit score as it has all the details of previous loans taken and their repayments. CIBIL score also gives the information of credit card bills payment.

Eligibility Criteria

Eligibility Details

Age

24 years – 65 years

Minimum Annual Income

Net income of the concern should be more than ₹150,000 per annum for business loan up to ₹1,500,000 and over ₹300,000 for business loan above ₹1,500,000.

Minimum Credit Score

700 and above

 

Business loans for Self Employed Professionals (SEP) :

Allopathic doctors, chartered accountants, company secretaries and architects who are practicing their profession. Proof of qualification needs to be shared.

Business loans for Self Employed Non-Professionals (SENP) :

Traders and manufacturers, retailers, proprietors, service providers, etc.

Business loans for Entities:


Partnerships, limited liability partnership, private limited and closely held limited companies. Other constitution types depending on their profile on a case to case basis.

Based on your meeting the business loan eligibility criteria, you can get the funds up to a limit of Rs.30 lakh to 5 cr.

Documents required to apply Business Loan

It is possible to manage the cash flow, upgrade business equipment and grow the business by the option of business loans. Each bank has specific requirements, criteria and eligibility factors. Here is the list of few banks document requirements and other details mentioned.

    • Filled up loan application form
    • 2 Passport Size Photo
    • Copy of Income Tax PAN
    • Identity Proof – Aadhaar, Passport / Driving License / Voter ID / PAN / Passport
    • Residential Address Proof – Leave and License / Registered Rent Agreement/ Utility Bill (upto 3 months old), Passport
    • Financial documents: Income Tax return (ITR)  & profit & loss & balance sheet of last 2 years, last 6 months bank statement & business proof.
    • Financial Documents: Copies of IT returns for the last two years along with the latest Bank statements for 6 months and P & L and balance sheet for last two years audited by a C.A.
      • Self Employed (Private Ltd. Co. and Partnership Firms): P & L Copies of Income Tax returns for the last two years and P & L and balance sheet for last two years audited by a chartered accountant.
      • Self Employed Individuals – Professionals: Copies of Income Tax returns for the last two years and Bank statements for last 6 months and – Professionals: P & L and balance sheet for last two years audited by a chartered accountant
      • Self Employed Individuals – Non Professionals: P & L and balance sheet for last two years audited by a chartered accountant and Copies of Income Tax returns for the last two years and Bank statements
  • Current year performance and projected turnover on letterhead of the entity
  • Proof of Business Continuation
  • Business Ownership[ Proof: Other Mandatory Documents such as Sole Proprietorship Declaration, Certified true copy of Memorandum & Articles of Association
  • Last 3 years audited financials.

Step by step Business Loan Application Process in India :

Step 1 : Check Business loan EMI and calculate eligibility

As you decide to take a Business Loan, always estimate your loan amount eligibility to know the loan amount you will be eligible for and can apply for. Also calculate the monthly EMI that you can comfortably service given your net take personal salary and other existing fixed obligations including rent and EMIs on other existing loans, if any. Your house loan eligibility is calculated based on your age, net income, existing obligations, property type, LTV ratio and other factors. EMI is dependent on the loan amount, interest rate and tenure. Once you understand your minimum loan requirement, your eligibility and monthly EMI you can comfortably service, shortlist the banks which offer you maximum loan amount to meet your requirements.

 

Step 2 : Check loan approval status and legal documents for business loan

If you are buying a property from builder, then check for the banks which have approved the projects you have shortlisted. For resale property, check the approved map plans and ensure that all property registration papers for the complete chain from the first owner to current owner are in place. Shortlist the banks which lend on your chosen property.

Step 3 : Decide on type of Business Loan interest rate offers

As you narrow down the list of banks in Step 2 and 3, you need to conduct an interest rate on Business Loan comparison of the loan offers of various banks. Some of the interest rate offers that needs to be checked are:

Choice between fixed and floating rates – Fixed rates come at a slightly higher rate of interest compared to floating rate loans and interest rate remains constant during the tenure of Business Loan. In floating rate loan, interest rates are reset at periodic intervals in response to changes in MCLR and PLR rates of banks or NBFCs. Majority of housing loans in India today are floating rate loans as it allows the borrowers to get Business Loan interest rate in line with the current interest rates.

Decide if you need a personal saver loan – This is a loan with overdraft facility which allows you to deposit surplus amount in your Business Loan overdraft account as and when available, allowing you to reduce your overall interest amount. This loan is highly recommended for salaried individuals with high bonuses and self employed business which is seasonal and has fluctuating cash flows. The interest rates on overdraft loan is slightly higher than that of a regular housing loan interest rate.

You can also evaluate a mortgage guarantee house loan as it covers any default risk and allows the lender to give you loan at low rate of interest. You will however need to pay a mortgage guarantee fee to the bank.

Check and compare the current Business Loan interest rates of the banks on various types of loan products and take an informed decision.

Step 4 : Compare shortlisted banks for business loan

In addition to interest rates, banks also charge many other fees on Business Loans. Along with interest rates, you should check other associated costs with a your loan which include prepayment charges, processing fee, insurance premium and other charges offered by the shortlisted banks. You should calculate all inclusive costs on Business Loan to be able to further shortlist the banks and reduce your choice to 2-3 banks.

You can take the help of loan advisors of online on various websites listed below.

  1. https://www.myloancare.in/
  2. https://www.paisabazaar.com/
  3. https://www.bankbazaar.com/
  4. https://indianmoney.com/
  5. https://www.deal4loans.com/
  6. https://www.wishfin.com/
  7. https://indialends.com/
  8. https://www.bajajcapital.com/
  9. https://www.apnapaisa.com/
  10. https://www.rubique.com/

 

Step 5 : Select the bank based on other service related parameters for business loan

Finally as you decide to take the loan, also consider other service and transparency related parameters of the chosen banks. Some of these factors are turnaround time offered by the banks, quick loan delivery, doorstep services, transparency in the loan process. You also need to understand the trends and changes in MCLR rates over a period of time. Last but not the least, read reviews of existing customers on banks on their services, interest rates and transparency to take your decision to borrow from a bank.

Business Loan Interest Rates of Various Banks

Bank

Interest Rates

Lowest EMI per Rs. one lakh

Processing Fee

HDFC Bank

10.75% – 22.00%

Rs. 2,162

Upto 2.50% Min Rs. 1,999

Citibank

10.99% – 18.99%

Rs. 2,174

Upto 0.5%

ICICI Bank

11.25% – 22.00%

Rs. 2,187

Starting from 0.99%, Up to 2.25%

Bajaj Finserv

11.99% – 15.50%

Rs. 2,224

Starting from 1.50%, Up to 3%

IDFC Bank

11.50% – 19.50%

Rs. 2,199

Starting from 0.75%, Up to 2%

Tata Capital

11.75% – 18.00%

Rs. 1,942

Flat fee of Rs. 1499*, Upto 2.50%

RBL Bank

13.99% – 18.00%

Rs. 2,326

Upto 2%

 

IndusInd Bank

11.00% – 20.00%

Rs. 2,174

Min 1% to Max 2.50%

 

Lowest Business Loan EMI per lakh

Bank

Lowest EMI per lakh

Max Tenure

SBI Business Loan

₹ 2,658

48 months

HDFC Bank Business Loan

₹ 2,162

60 months

ICICI Bank Business Loan

₹ 2,187

60 months

Bajaj Finserv

₹ 2,224

60 months

Citibank

₹ 2,174

60 months

IDFC First Bank

₹ 2,199

60 months

Axis Bank

₹ 2,187

60 months

Tata Capital

₹ 1,942

72 months

Fullerton India

₹ 2,732

48 months

IndusInd Bank

₹ 2,174

60 months

Kotak Bank

₹ 2,149

60 months

RBL Bank

₹ 2,326

60 months

IIFL

₹ 2,275

60 months

HDB Financial

₹ 2,326

60 months

PNB

₹ 2,224

60 months

Andhra Bank

₹ 2,202

60 months

Yes Bank

₹ 2,174

60 months

Union Bank of India

₹ 2,260

60 months

Bank of Baroda

₹ 3,302

36 months

Syndicate Bank

₹ 2,296

60 months

Standard Chartered Bank

₹ 2,174

60 months

Bank of Maharashtra

₹ 3,471

36 months

Canara Bank

₹ 2,683

48 months

Corporation Bank

₹ 3,367

36 months

Karur Vysya Bank

₹ 3,413

36 months

Federal Bank

₹ 2,608

48 months

Indian Overseas Bank

₹ 2,260

60 months

Indian Bank

₹ 3,276

36 months

Allahabad Bank

₹ 2,283

60 months

IDBI Bank

₹ 2,286

60 months

Factors affecting Business Loan EMI :

Loan amount – This is the amount which a borrower decides to take from the bank in the form of a loan. Higher the Business Loan amount, higher will be the EMI.

Rate of interest – This is the interest charged on the borrowed loan amount. Lower the Business Loan interest rate, lower the EMI.

Loan Tenure – This is the time period for which you take a loan. Longer the Business Loan tenure, lower will be the EMI. Longest loan tenure available across banks in India is 5 years, subject to borrower’s current age and retirement age.

Following table provides a comparison of EMI for a Rs. 1 lakh loan at different tenures:

Loan Tenure

2 years

3 years

5 years

EMI amount for loan amount Rs. 1 lakh at 10.50%

₹ 4,638

₹ 3,250

₹ 2,149

Total amount you pay back to the bank including principal and interest

₹ 1.23 Lakh

₹ 1.36 Lakh

₹ 1.68 Lakh

Interest you have to pay over loan tenure

₹ 23,034

₹ 36,470

₹ 67,905

At the lowest interest rate of 10.50%, the lowest EMI for tenure of 5 years is ₹ 2,149 per lakh. You need to pay an interest of ₹ 67,905 on your loan amount of Rs. 1 lakh over 5 years.

If you take a loan for 2 years at the same rate of interest, you will have to pay a higher EMI of ₹ 4,638 and a total interest of ₹ 23,034 on your loan amount of Rs. 1 lakh for 2 years, which is much lesser than what you paid for a 5 years loan.

Business Loan Application Process in India :

Business Loan Application Process Online

If the Business Loan applicant has an existing relationship with the financial lender, he/she can apply for a Business Loan via his/her net banking account and could possibly be eligible for a pre-approval. For other customers, they can apply for a Business Loan online by following the steps mentioned below:

    • Visit the website of the financial lender.
    • Under the loan section, choose Business Loans.
    • Click on the ‘apply now’ option.
    • Enter the details in the Business Loan application form and submit it to the bank.
    • The bank will assess the eligibility of the applicant and request for the submission of the required KYC documents and income documents.
    • If the applicant is found eligible, the bank will disburse the loan amount to the bank account of the applicant, as mentioned in the application form.

Business Loan application offline

Listed below is the process of applying for a Business Loan at the branch of the financial lender:

  • Visit the branch of the financial lender
  • Procure the Business Loan application form and enter all the required details.
  • Submit relevant documents that prove one’s income, age, address and identity.
  • The lender will then verify the documents and check the eligibility of the applicant.
  • The loan amount will be transferred to the bank account of the applicant if he/she is found eligible.

Email and phone banking requests:

You can leave a request for Business Loan with the bank through an email or at the customer service centre of the bank. The bank will review your eligibility and contact you to take the process further.

How Business Loan Applications are processed :

The process of sanctioning of a Business Loan is simpler than property loans such as home loan and car loan. This is because, in case of property loans, the bank has to verify not just your financial information, but also the credibility and eligibility of the asset that you are purchasing with the loan amount. For Business Loan, you are the collateral security yourself, so the bank has to do a background verification only on you.

    • Once the bank receives your loan application, it will check the information provided by you against the data available with them, such as bank balance, salary deposits made into your account, EMIs being deducted from your account, etc.
    • The bank will cross-check and confirm your identity and address details through your Know Your Customer (KYC) documents. Banks may visit you at home to confirm your place of residence and check with your office on your employment tenure.
    • The copy of your Income Tax Return or salary pays lips will help the bank gauge your repayment capacity. This will help determine how much loan amount the bank is willing to sanction to you.
    • Some banks might ascertain your credit-worthiness by finding out your CIBIL score. The higher the CIBIL rating, the more your chances of getting the loan approved.
    • The bank will also review your age, number of years of employment left, and salary growth prospects, to decide how much loan it can approve for you and what the repayment period should be.

How is Business Loan EMI calculated?

Loan Business Loan Calculator uses the combination of loan amount, loan tenure and interest rate to calculate EMI online. Besides this, it also tells you how much rate of interest you would pay over your loan period. Longer the loan tenure, more the amount of interest for same loan amount and interest rate.

How much should I pay as monthly EMI for Business Loan?

Monthly EMI depends upon your income and expenses. Generally, banks advise you to limit your EMI to 35% to 45% of your net income so that you can pay your EMI without any burden or difficulty. You can calculate your EMI online which will help you to know your repayment capacity.

What if I miss EMI payment or there is an ECS bounce?

If you miss your EMI payment or if there is an ECS bounce then bank may charge a penalty. In addition, it will also be reflected in your CIBIL report and your CIBIL score may get impacted.

What if I get delay in paying the Business Loan EMI?

Banks charges penalty for delaying EMI payment. The amount of penalty varies from bank to bank.

Why it is necessary to calculate EMI beforehand?

It is important to calculate your EMI in advance to maintain stability in future payments. When you avail loan, you promise the bank to pay a fixed amount at fixed date every month. So, before availing the loan you should consider the stability of your income, monthly expenses and the existing loan obligations to avoid any discrepancies in future payments.

 

 

 

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