How is EMI calculated on my business loan at Buddy Loan?

The EMI on your business loan is the amount you will be paying monthly to your loan lender.
This amount is computed to include the interest and the principal amount. You pay steadily fixed
EMIs for the tenure of the loan, progressively, reducing the amount of money you owe the bank.
The bank may choose to calculate the EMI using the reducing balance method or the flat rate
method. `

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However, loan aggregators help you with the best repayment options for a good 5 years.
Explore Buddy Loan in order to reap more benefit for a Instant business loan online. Meaning more benefits on tax.
Factors that affect the size of your EMI
Change in loan tenure: When your loan tenure is changed, even by a month, it changes the size
of EMI. When you want a smaller EMI amount, the tenure is elongated. However, the longer the
tenure, the higher the interest rate.
Higher EMI amounts result in a shorter tenure and lower interest rate.
Prepayment of the firsts EMI
When you pay the first EMI in advance, it reduces the size of the principal that you owe the
bank. Therefore, as a result, your consecutive EMI amounts will be reduced.
Shifting your loan to a different lender:
Different lenders have different interest rates, and therefore, the amount of EMI will vary. When
you transfer your business loan to a different lender, then your payment changes.
Flat rate method
Principal amount+ interest on the principal = EMI
Number of periods* number of months

Reducing balance Method 1
The mathematical formula to calculate EMI
P*R*(1+R)^N = EMI
[(1+R)^n-1
P =principal amount
R =The rate of interest
N = Number of repayment periods
Method 2
Using an excel worksheet
Using the same variables but the function
PMT=Rate* number of repayment periods* amount of loan
Method 3
Use an online calculator. If you are applying for an online loan, most providers will have an
online calculator where you key in the variables and compute your EMI.
The bank computes the interest you pay using two methods. These are:
• Simple interest. This type of investment is calculated only on the amount of loan given
out.
Principal* interest rate * the Number of repayment periods.
• Compound interest: In this method, the interest is added back to the amount borrowed
for you to calculate the next year's interest
Principal*interest rate= interest for year 1
Principal interest for year 1) * interest rate = interest for year 2
Factors affecting your business loan interest rate
 Amount of interest paid depends on the prevailing bank interest rates
 Your credit score matters a lot
 Late payments cause an increase in your interest rate
 The terms of loan affect the interest rate
 The interest rate is the price you have to pay
These factors will, in turn, affect your EMI. Therefore, it is paramount to be keen on each
element as you apply for your business loan.

What are the uses of a business loan?

Uses Of Business Loan

A business loan is a money you procure from a lender to be able to facilitate the operations of your business. It may be a secured business loan or an unsecured business loan. Make life easier and better by availing a business loan with Buddy Loan, get high benefactors. 

The lenders have made it easy for you to apply for an instant business loan online. Confirm that you fulfil the requirements to apply for an online business loan and decide on the amount you need. Make your application and wait for the bank to verify your request.

Purposes for the instant business loan are:

Expansion

One of the reasons why businesses apply for SME loans is to expand. When business is flourishing, you may need an expansion opportunity. When you make use of the opportunity, you need to ensure that your cash flow and profits are not interfered with. You approach a bank and request a business loan. Start a business.

Start a business

The most common reason people apply from an unsecured business loan is to start a business. As much as this is not a very wise reason, it does offer a reprieve for dire situations.

Purchase Equipment

Almost all business requires equipment or two to run efficiently. This expenditure being capital in nature may be burdensome for a new or expanding business to bear. Therefore, a business loan would come in handy to assist the business.

Inventory

A business continually needs to stock on their inventory. They need to have stock they can sell as their buyers prepare to pay for what they have bought from them. Inventory is one of the largest and complicated a business has to manage. You always have to stock enough options for your customers to buy. Consider applying for a business loan online to stay ahead of trends and customer demands, as well as keep your cash flow optimum.

Cash Flow

When you are dealing with customers who won't pay, and you are still stuck with inventory, you have not sold, then cash flow may be a problem. However, you need not be stuck when you can apply for an SME loan online to finance your cash flow. Your business stays afloat as you can pay for your operating costs using the money. 

A short-term loan provides money to be used for your regular operational costs and can help your business survive when profits are low. By keeping money flowing through your business, you can continue to get new customers to drive revenue while making up for other losses.