Monthly or quarterly instalments, flat or reducing interest, and the effective rate after fees.
Monthly or quarterly instalments
Business loans may be repaid monthly or quarterly. With quarterly instalments the rate per instalment is the annual rate ÷ 4 and there are four instalments a year; the tenure must be a whole number of quarters.
Instalment = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), r = annual rate ÷ instalments a year
Flat or reducing
Some business and equipment loans quote a flat rate. A flat rate charges interest on the full loan for the whole term; the calculator works out the reducing-balance rate that costs the same, so offers can be compared fairly. Never compare a flat rate with a reducing rate directly.
Cost after fees
The annual cost rate treats the loan amount minus the fees you enter as what you received, and finds the reducing-balance rate at which your instalments repay it.
Results are worked out from the numbers you enter and are for planning only. They are not an offer, an approval or financial advice. Finobazaar does not assume any lender's rate or rules; the lender's loan agreement and its key fact statement decide the actual EMI and charges.