Any loan that comes with a fixed period for repayment of the debt is known as a term loan. The repayment tenor for a loan can range between 1 year and 20 years, depending on its nature. Similarly, interest rates for term credit can be either fixed or floating.
Regardless of the loan type, you must perform an extensive calculation before availing term loans.
Using online calculators
Manual calculation of interest was a common practice before the advent of special online calculators. While you can still follow the manual route, most people today rely on loan calculators available on the internet for these calculations.
Access these term loan calculators on the Internet. In the specified fields, enter the loan principal, rate of interest and tenor. After verifying these details, click on calculate.
The tool should show your EMIs for the loan along with the total interest payable. It can help you determine the perfect loan quantum, especially if you operate a company and are seeking a business loan.
Here are some advantages of using such a calculator when opting for a term loan –
- Quick calculations
Manual calculations require you to follow a complex formula when determining the interest payable and instalments for a loan. This can be time-consuming and lead to inaccuracies.
Term loan calculators offer a better alternative, ensuring speedy calculations every time. It barely takes any time to understand how to use an EMI calculator, making the entire process more streamlined.
- No errors
When you calculate manually, there is always some room for mistakes. When dealing with such large sums of money, even a small error can have a great impact on the outcome.
A term loan calculator, on the other hand, almost nullifies this risk of making mistakes. You can use a business loan EMI calculator to make a proper assessment.
- Essential for loan comparisons
Many NBFCs offer term loans to consumers in India. Some of these companies offer credit at lower rates of interest when compared to others. Therefore, to ensure the most profitable deal, you need to compare the available loan products in the market.
Several people feel discouraged to undertake such comparisons when performing calculations manually. However, the presence of EMI calculators can greatly simplify this process, allowing you to pick the loan option that suits your individual needs.
- Taking an informed decision
While financers often entice you to avail loans, you need to verify whether you are comfortable with the resulting EMIs for the credit. Calculations can help you understand your exact monthly payments for a particular sum of credit. Therefore, you are free to make the final call based on the results of these calculations.
Whether you are looking to finance your growing business or fund a wedding, using a term loan calculator is vital in every case. While there are several types of term loan, the calculator can effectively deliver accurate results in each instance.
If you are unsure about interest rates or tenor options for a loan, verify the information online through the lender’s website. Ensure you choose a reputed financing company for term loans to avoid loan repayment hassle or other issues in the future.
You can choose NBFCs like Bajaj Finserv, which provide financing up to Rs.30 lakh with flexible repayment tenors.
Do not take a chance when availing loans. Use the calculators to determine the perfect loan amount and EMI for you before loan application.
Read Also:
