EMI (equated monthly installments) infers to the fixed amount of money that a person has to pay to the bank every coming month. EMI consists of both interest and principal reimbursement. The amount of the EMI entirely depends upon the quantum of loan, rate of interest applicable and the tenure of the loan.

Capital is the life line of a business and no business can run without capital. For any business, capital is required to keep the momentum going. A business loan is the loan provided by the lender to an organization or an individual which has to be repaid with a certain rate of interest and within a specified tenure.

Secured Business Loan: It means that the entrepreneur has to keep some financial security as a guarantee against the loan amount taken. It can be land or machinery, finished products; anything can be kept as a guarantee in agreement to the lender. Unsecured Business Loan: In this loan, the entrepreneur has to keep some financial security as collateral to take the loan. The borrower gets unsecured loan at a high rate of interest.

All kinds of enterprises are provided Business loans, be it a sole proprietorship, a partnership or a private limited company. Although the income, requirements of the concerned differs from bank to the bank but normally net income of the concern, should be more than Rs. 200,000 per Annum for business loan up to Rs. 15 lakh and over Rs.3 lakh for business loan above Rs. 15 lakh. A maximum of two incomes of the partners or directors holding a minimum of 25% stake each can be clubbed to the income of the concern.

Personal loan is an unsecured form of loan with fixed EMI and payment schedule. This loan can be used by the borrower anyhow he/she wants, and there is no need of securities like house, commercial property and other financial securities.

There are multiple benefits of availing a Personal Loan:

• No requirement of security/guarantor
• Quick Processing: Time for a loan depends upon the documents submitted and can be sanctioned within 72 hours
• Interest Rates are effective
• 12-60 Months repayment period through Electronic clearing Services, Post Dated Cheques, Account Debit

The eligibility for a personal loan differs from bank to bank. The main factor is your ability to repay the amount of loan. A person’s profile in terms of place of working and the residence is also taken into account. One should make sure to check all such eligibility measures before applying for a personal loan.

Interest rate for personal loans is higher than rates for a secured loan example home loan, Loan against property etc. Other loans are secured, and there is a security provided by the borrower to the bank. Interest rates vary.

The calculation of interest rates on home loan is on Monthly Reduction or Yearly Reduction balance. In Monthly Reduction Balance, the principle on which one pays interest keep on reducing every month as one pays the EMI. Whereas in Yearly Reduction Balance, the principle gets reduced by the end of the year; therefore borrower continue to pay the interest on a certain part of the principle which he has paid back to the bank, which means the EMI for the Monthly Reduction system is less effective than the Yearly Reduction system of calculating the interest.