A commercial loan is a crucial resource for organizations and business owners to acquire finance to purchase a commercial property. In the current growing economy of India, people's investment and purchasing power have increased significantly. As a result, small business owners have started investing in commercial properties to expand their business opportunities and scope. However, as an enterprise owner, you must be aware of the costs incurred for loan borrowing. A commercial property loan calculator is a vital tool in the process.
The following sections will delve deeper into understanding how a commercial land loan calculator works and how it helps.
What is a Commercial Land Loan Calculator?
A commercial property mortgage calculator is an online tool for estimating loan EMIs based on provided details. It uses three important variables to calculate the EMIs: the principal loan amount, interest rate, and loan tenure. The calculator delivers instant results, allowing you to make your borrowing decisions proficiently.
How Does Commercial Property Loan Calculator Work?
Using a commercial property mortgage calculator, you must enter a few basic home details to calculate your EMIs. These include your loan amount, repayment tenure, and interest rate. Once you enter the required details, the commercial mortgage calculator uses the following formula to calculate your EMIs:
EMI = PR(1+R)^N/((1+R)^N-1)
Here, P is the principal amount you borrow, R is the interest rates in percentage, and N is the number of months in the loan tenure. The calculator instantly displays the results with the EMI amount and total interest outgo. You can adjust the repayment tenure to decide upon an affordable EMI scheme based on these.
Also Read: Commercial Vs Residential Property: Which Is Best For The Investing And Rental Purpose?
Factors Affecting Commercial Loan EMI
Now that you know how a commercial mortgage calculator works, let’s look into the factors affecting loan EMIs:
- Interest Rate: The interest rate is a crucial factor affecting your loan EMIs.
- Loan Amount: Your loan amount is directly proportional to your EMIs.
- Loan Tenure: A shorter tenure reduces the EMI amount, while a longer tenure increases it. Therefore, you must choose the shortest possible term with affordable EMIs.
- Credit Score: Your credit score helps the lender determine your responsibility and diligence towards credit. Based on that, the lender determines your loan amount and interest rate, ultimately affecting your EMIs.
- Type of Interest Rate: Interest rates can be of two types: fixed and floating. The kind of interest on your loan affects your EMIs.
Also Read: All You Need To Know About Commercial Property Loan
Benefits of Using a Commercial Loan Calculator
Let’s look into the benefits of calculating EMIs using a commercial property or LAP loan calculator:
- Instant and Accurate Calculations: A calculator provides more accuracy than manual EMI calculations within seconds.
- Financial Planning and Budgeting: Based on the results, you can manage your cash flow and budget to repay adequately.
- Time-Saving: Using a commercial property loan calculator helps save time by providing the results almost instantly.
- Understanding Loan Affordability: After knowing the exact EMI amount, you can easily determine your affordability and plan your borrowing.
- Transparency in Loan Terms: Accurate results based on your loan details provide transparency for borrowing decisions.
Also Read: What Are Commercial Loans In India?
A Formula to Calculate the Monthly Commercial Loan EMI Amount
Here is a simple formula to calculate the monthly EMI on commercial loans:
EMI = PR(1+R)^N/((1+R)^N-1)
Here, P = principal amount, R = rate of interest, N = loan tenure in months
Conclusion
A commercial property loan calculator is a valuable tool that helps prospective borrowers assess their EMIs and plan for successful investments. By offering accurate and quick estimates of the monthly obligations, it empowers people to make informed borrowing decisions and confidently navigate the complexities of different types of mortgages.
Frequently Asked Questions
1. How much loan can I get on commercial property?
The loan amount you can borrow depends on your eligibility, creditworthiness, DTI ratio, EMI affordability, income, financial obligations, and the lender’s policy.
2. Is commercial property loan taxable?
Yes, a commercial loan is taxable. However, you may avail of government subsidies under various schemes and tax benefits under the Income Tax Act.
3. What is the period of a commercial loan?
The period of a commercial loan depends on your EMI affordability. Choosing a repayment tenure with smaller EMIs prolongs the repayment period and vice versa.
4. How do we get a commercial loan?
To obtain a commercial loan at Hero FinCorp, you must fill out an online application form, provide the required documents in digital form, pay the processing fee, and wait for the verification process to complete. Once you receive the loan offer, review it carefully and accept it to get disbursal directly into your bank account.
5. What is the processing fee for a commercial loan?
The processing fee is a small percentage of the loan amount you borrow. So, it depends on your loan eligibility.
Disclaimer: The information provided in this blog post is intended for informational purposes only. The content is based on research and opinions available at the time of writing. While we strive to ensure accuracy, we do not claim to be exhaustive or definitive. Hero FinCorp does not take responsibility for any discrepancies, inaccuracies, or changes that may occur after the publication of this blog.
