What is Corporate Finance, and How to Calculate Its EMI?

Corporate finance is the arm of the business in charge of managing the monetary side of a business through various strategies. Irrespective of the size of a company, optimising this division can bolster the financial side of that organisation and bring stability.

However, corporate finance is often interchanged and used to represent business credit or loans available for companies. Financial products like these are tailor-made to support firms to meet their wide range of economic activities.

Nonetheless, borrowers can calculate their EMIs in advance to find their suitable repayment options and plan their finances accordingly.

How to calculate EMIs for corporate finance?

You can calculate the EMI of business credit by using online calculators. Here is a step-by-step guide –

Step 1: Visit the lender website hosting the business loan EMI calculator 

Step 2: Enter loan details such as desired loan amount, interest rate, and tenor

Step3: It will then calculate the EMI and display results instantly

Step 4: Adjust different aspects of a loan through the given options, and find your suitable EMI figure

Using an online calculator like this is hassle-free and offers accurate results within a few seconds.

Apart from this, you can always calculate EMIs manually by using the traditional formula, i.e. –

  • EMI = P × r × (1 + r) n/ ((1 + r) n – 1)

Here P stands for the principal amount, r is for the rate of interest, and n is for the number of terms or loan tenor.

Even though you can manually calculate EMIs, it leaves room for mistakes and often takes a long time to complete. Hence, an online calculator fares better in this regard. Besides accurate and swift results, online devices like this have other advantages as well.

Advantages of using online EMI calculators

  • Learning about the loan repayment

Besides EMI calculation, it helps you to learn more about the repayment structure of your corporate finance. EMI calculators like this has loan amortisation schedule attached to them, which provides a detailed break up of this repayment structure.

  • Finding a correct loan tenor

Since online devices like these offer customised solutions, you can now use them as a suitable loan tenor. You can now enter different values to find the perfect loan offer that helps you to build your business brand and meet your repayment capacity.

  • Make a comparison

Online devices like these enable you to compare various loan offers to find the ideal one. You can use the customisation facility for this purpose.

Knowing the monthly instalments beforehand helps you to plan your finance accordingly and make an informed decision. However, to better that decision even further, you should keep in mind some other vital aspects of a loan.

4 points to consider before applying for a loan

  1. Interest rate

Since the interest rate determines the total outstanding amount, considering it in advance is imperative before applying for a loan. Also, be well-informed about the type of interest rate and its implications before taking a call.

  1. Eligibility criteria and documents

Being aware of the eligibility criteria in advance can also help while applying for a loan. Since meeting these parameters is imperative, knowing them in advance and preparing accordingly can help you avoid any rejections.

Moreover, keeping the required documents handy is also helpful, as it bypasses any unnecessary delays during the application.

  1. Additional charges

Every loan application entails some additional charges, and a business loan is no exception. Therefore, before applying for one, review this pointer and assess the total cost of borrowing.

  1. Pre-approved offers

Lastly, look for pre-approved offers for a hassle-free loan application process. Leading financiers like Bajaj Finserv extend such offers to their existing clients. Available on business and personal credit options, you can now check your pre-approved offers online.

Corporate finance as a credit instrument allows entrepreneurs to meet their wide range of financial requirements without any difficulties, and keeps your business financially healthy.