Business Loan Prepayment Calculator

The purpose of Urban Money's Business Loan Prepayment Calculator is to inform users of their loan repayment amounts following a repayment. It hеlps usеrs gaugе thе potеntial savings and timе rеductions on thеir loans, allowing thеm to makе informеd dеcisions about thеir businеss financing stratеgiеs. Lеt thе tool bе your guidе in your financial planning and makе your important monеtary decisions with diligеncе. 

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Revised Monthly EMI

Key Takeaways:

Original EMI

Revised EMI

Savings in Interest

Business loans are always huge thus it is wise to prepay the business loan amount as early as possible. Your bank will permit premature closure of your loan but they will also charge a penalty fee. But how will you calculate your EMIs or part payment and other things?

Well, you can simply use the business loan prepayment calculator and calculate everything you want to know. A business loan prepayment calculator can make things easier for you.

What is a business loan prepayment calculator?

MSME loan or Business loan prepayment calculator is a great help when you want to know the EMIs of prepayment and plan your loan foreclosure.

With this business loan prepayment calculator, you can check the basic details such as principal amount, EMIs paid, date of prepayment, rate of interest, and tenure of your loan. You will get the details automatically and you can get a more clear picture.

Business Prepayment Loan Features & Benefits

Here are some business prepayment loan features and benefits.

  • Be Free From Debt

Business loans always take a big chunk of your profit and sometimes can cause financial distress when the profit is low. Therefore, whenever you get a chance to prepay your business loan after the end of your lock-in period you must do it. Paying the outstanding amount early can help you in making debt-free.

  • Reduced Debts

A business loan prepayment calculator helps you in lowering your debt burden. However, if you prepay the outstanding loan amount, the debt burden will decrease. Make sure to prepay the business loan and plan everything using a business loan prepayment calculator.

  • Lowered Interest Outflow

When it comes to business loan prepayment, the crucial factor to consider is the tenure of your lock-in period. It means a time period for which your lender does not allow you to make any prepayments full or partial towards the outstanding loan amount.

Therefore, to know how much you are saving on the interest applicable on your loan amount you can use the business loan prepayment calculator. Also, make sure to ask about the processing fee on the prepayment of your business loans. The charges on prepayment vary from one financial lender to the other.

  • Improve Your Credit Score

Business loan prepayment can improve your credit score. It is because the earlier you pay your outstanding principal amount the better your credit score becomes. It will help you in getting another business loan instantly.

How does a business loan prepayment calculator work?

Before we know how business loan prepayment is calculated, remember that all the lenders have a lock-in period due to which you cannot prepay your loan. Also, if you have repaid the loan in terms of EMI structure in the lock period then only a prepayment facility will be available for you.

Once you enter the required details, the business loan prepayment calculator will do all the maths for you. Get accurate answers without taking any stress of complex calculations.

How to use Urban Money business loan prepayment calculator?

Using Urban Money business loan prepayment calculator is quite an easy task. You simply have to enter some values and you can get all the business loan prepayment details.

You have to enter your principal amount, the EMIs you have paid, the date of prepayment, the rate of interest, and tenure of your loan. Once you enter all these details click on the submit button and business loan prepayment calculator will answer all your questions.

Usefulness of Business Loan Prepayment Calculator

Use the following tips for using Business Loan Prepayment Calculator:

  • You can manage operational costs at a good rate by using the business loan prepayment calculator for accurate calculations.
  • Maintain your working capital.
  • You can boost, support, rehabilitate, or buy new machinery, software, and other assets after saving money from interest after the prepayment.
  • With the saved money you can improve your business infrastructure.
  • You can also use that saved money and take your business online.

You can simply save the money after doing the prepayment of the loan. This business loan prepayment calculator can help you achieve all these things.

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Frequently Asked Questions (FAQs)

What is a prepayment of a business loan?

Prepayment of a business loan means making extra payments outside your monthly scheduled EMIs. Also, repaying your loan early will help you in saving some amount on interest. However, some lenders charge a prepayment fee to cover the losses which they might have earned on your long-term business loan.

Are there any prepayment charges on business loans?

If you are pre-paying your complete loan (known as loan foreclosure), then the prepayment fee charged will be 4% of your entire outstanding amount. Also, 4% of the principal part was paid in the EMIs in the last 12 months.

How much interest should I pay on a business loan?

On an average basis, the loan interest rate varies between 2.54% to 7.02% from one bank to another or to different financial lenders. However, the rate also depends on various other things.

Does prepayment reduce principal?

When you make a deposit as a prepayment the total principal outstanding is decreased. This, in turn, will reduce the rate of interest calculated at the end of that month. Thus, the EMI is paid in the next month, the interest will be less than the previous one. Therefore, more money will go towards the principal.

How are partial payments on a loan calculated?

Let’s understand it with an example. If you deposit the prepayment amount on the 15th of a particular month then the prepayment interest will be calculated from the 1st to the 14th of the month.

Is the prepayment calculator and the EMI calculator different?

The EMI calculator returns the EMI amount every month over the tenure. However, the prepayment calculator returns the revised loan condition of EMI or tenure after paying some amount. Also, EMI calculator needs loan amount, period, and rate of interest as input whereas, business loan prepayment calculator needs principal amount, EMIs paid, date of prepayment, rate of interest, and tenure of your loan.

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