GST calculator and business loan EMI calculator are two of the basic online tools that help individuals assess their liabilities quickly and easily.
These calculators are hosted by several websites, which can be found through a simple online search.
The functions of these calculators and how individuals can use them are discussed in details bellow –
GST calculators, as the name suggests, help individuals evaluate applicable GST on given products and services.
This identification can further help them fix the selling price of the concerned item, among other uses. These calculators use the following formula to calculate the taxes.
GST = Value of supply x GST rate / 100
For example, assume that a business is calculating the GST at a rate of 18% on a product that costs Rs. 10,000.
As per the formula –
GST = 10,000 x 18 / 100 = Rs.1,800.
Thus, the product’s selling price will be Rs.10,000 + Rs.1,800 = Rs.1,1800.
There are several types of GST calculators which can show –
- Gross amount (net amount + GST), CGST and SGST payable and total tax to be paid.
- Show the net amount via subtracting GST from the value of supply.
- Input tax credit and reverse charge payable.
- Different options based on the user type – GST calculator for buyers, manufacturers, and sellers.
Even though GST calculators can be found online, these are usually integrated with ERP software used by businesses. Some financial institutions also provide these calculators for user convenience.
Loan EMI calculator
A business loan EMI calculator, as the name suggests, helps individuals evaluate their monthly instalments payable towards a loan.
EMI = [P x r x (1 + r) ^n] / [(1 + r) ^ n – 1]
In the above formula –
- P – Principal or loan amount.
- r – Rate of interest.
- n – Loan tenor in months.
For example, a borrower takes a business loan of Rs.12 lakh at an 11% rate of interest for a tenor of 5 years.
As per the formula –
EMI = [1200000 x 11/100 x (1 + 11/100) ^60] / [(1 + 11/100) ^ 60 – 1] = Rs.26,091
Apart from EMIs, individuals can use a business loan EMI calculator to check the –
- Total interest payable.
- Cost of loan (principal + interest).
- Amortisation schedule.
Benefits of using business loan EMI calculators
- Helps to pick the right tenor
Not only monthly instalments but individuals can use an EMI calculator to choose the right tenor as well. Shorter tenors make EMIs expensive and vice versa.
For example, if the above loan was availed for a tenor of 3 years, the monthly instalments would be Rs.39,286. However, the cost of the loan will be Rs.14.14 lakh, which would have been Rs.15.65 lakh earlier.
- Assists towards loan foreclosure
The amortisation schedule shows the division of interest and principal in EMIs throughout the loan tenor. It can help borrowers to pick a suitable time to foreclose the business loan.
Early foreclosure can lead to a lump sum payment as the majority portion of the loan remains outstanding. On the other hand, paying towards the end of the tenor will be a loss as most of the loan interest has already been paid off.
- Eliminates the need for a manual calculation
One of the most crucial benefits of using business loan EMI calculators is that these financial tools eliminate the need for a manual calculation, which can be time-consuming and prone to errors.
A business loan EMI calculator can be found on the websites of all leading NBFCs. Lenders like Bajaj Finserv also host these tools among others like eligibility calculator, part-prepayment calculator, etc.
This lender also helps save time when availing loans with their pre-approved offers. These offers are available on a host of financial products like personal loans, business loans, etc. Individuals only have to provide their name and phone number to check their pre-approved offer.
In conclusion, online tools like EMI and GST calculators save valuable time while showing accurate results. These can also be used by individuals with minimum knowledge of the internet.