Factors that affect commercial loan EMI

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Factors that affect commercial loan EMI

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Here are some factors lenders take into
consideration before granting business loans

• A business loan is a quick way to meet business
  expenses. It can be for business expansion or
  meeting several sectors of business. A business
  loan is always a good option, but a low EMI will
  always make borrowing easy and smooth. The
  consideration should be to keep the business loan
  interest rate low, so that the EMI for the month
  will be low. There are other factors behind the
  EMI amount. Check them out.

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What is EMI?

• When you take a business loan, the repayment is
  done on the basis of an EMI scheme. The equated
  monthly installments will be paid by the borrower
  every month to close the loan within the tenure.
  This amount will have the principal amount and
  the rate of interest added to it. The main idea
  should be to keep the business loan interest rate
  low so that the EMI is also low.

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Principal borrowed

• The principal loan amount that you will need to
  start, grow or expand a particular small
  business. The higher the amount of loan, the
  amount of EMI payable will also be very high.
  Make sure you choose the right principal amount.
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• Rate of interest One prime factor that will
  affect the EMI amount will be the rate of
  interest on the business loan. The higher the
  interest rate on the business loan, the more EMI
  you will have to pay every month. That is why you
  must do a good comparison and then only go for
  the lowest rate of interest.

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Tenure of the loan

• The tenure is directly responsible for the EMI
  amount every month. A long-term loan will give
  you low EMI as the tenure is longer. For a
  short-term loan, you will get a high amount as
  there is a low time to repay the loan. This will
  help you understand the loan amount in the right
  way.
• Monthly rest period Under and according to the
  monthly rest period, the rate of interest will be
  completely based on the overdue or outstanding
  principal amount. That signifies that with every
  EMI amount that one pays, there will be a huge
  reduction in interest over time.

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Annual rest period

• Under the annual rest, the payment for the EMI of
  a loan can be calculated based on the interest
  that is calculated on a personal loan will be
  reevaluated at the end of every annual year.

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Wrapping up

• Try to keep your business loan interest rate low.
  Only then can you make the best use of the funds.
  The burden will be low and the low EMI will be
  very easy to pay back. Make sure you go for a low
  business loan interest rate.

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Clix Capital Services Private Limited

• Address
• 901b, 9th Floor, Two Horizon Centre, DLF Phase V,
  Gurgaon, Haryana, India 122002
• Phone Number 1800 200 9898
• Email us at  hello_at_clix.capital
• Website www.clix.capital

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