Business owners have to handle several tasks to continue operations. It might include manufacturing, transportation, middle-office operations, and more. Therefore, it is plausible that a business owner needs investment to keep the enterprise alive. Luckily, loan options are available for business owners in India. MSME loans, working capital loans, and many other options are available for business owners. However, a business cannot relax after generating funding via a loan. The enterprise is responsible for repaying the entire loan to the respective lender. On failing to repay a loan, the credit rating of a business might go down. Read on to understand the ways to manage EMIs responsibly for a loan.

Ways to Manage EMIs Responsibly For a Loan

1. Identify the right business loan size 

Let us say an MSME requires the funding of ten lakhs to purchase machinery. The MSME has already contacted the seller and knows the machinery will cost no more than ten lakhs. In such a case, there is no profit in applying for a business loan worth more than ten lakhs. The extra money will sit idle in a business account, and the MSME will keep paying interest to the lender. Therefore, it is essential to analyse the right loan amount for a business before contacting the lender. Make a list and analyse the required expenses to know the right loan amount. You don’t want to increase the EMI burden for a loan you never wanted.

2. Analyse the repayment capacity

Every business might not have the same repayment capacity. For example, a micro-enterprise might not pay instalments of more than 1-2 lakhs. On the other hand, a large enterprise might pay more than ten lakhs in EMIs monthly. Before applying for a loan, a business owner should consider the revenue and turnover of the business. Apply for a loan the business can easily repay within the given tenure.

3. Choose the repayment period wisely

While applying for a loan, a business has the choice of deciding on the repayment period. Businesses can go for a longer repayment period to reduce the EMI burden. However, the interest rates on business loans are available throughout the repayment tenure. It means the interest charge will increase when the repayment period of a loan is long. Businesses confident of repayment in quick succession can go for a short tenure.

4. Avoid late or default payments

A business will lose its credibility by continuously missing out on EMIs. The lender will not approve the enterprise for future loans due to irresponsible repayment. Not to forget, the credit rating of the enterprise will go down. Also, the business might need to pay late fees for not depositing EMIs timely. For the same rationale, it is suggested to go for a business loan that can be easily returned to the lender.

5. Pay extra attention to the interest rate

When applying for a loan, businesses do not research properly. As a result, they might take a loan from a lender with extremely high rates. High interest on a loan will increase the EMI burden for the enterprise. Take some time and find a suitable lender that applies affordable interest rates on business loans. Many enterprises trust Fullerton India, for its low interest on loans.

6. Avoid another business loan

Enterprises should refrain from applying to other lenders before finishing the existing one. Take your time and finish repaying the entire loan to the lender. Once the loan is repaid, the credit rating of the enterprise will increase. Also, the enterprise will become eligible for higher loans from the same lender.

7. Keep the savings account intact

Sometimes, the growth of a business stops, and the EMI burden can increase. For example, businesses failed to generate ample revenue during the recent COVID pandemic. In any such situation, the savings account can help repay the loan EMIs. Despite low growth, the business will not miss out on EMIs.

Also Read: Emergency Funds at Your Fingertips


There are several loans for businesses available without collateral/security. Fullerton India is the apt choice for enterprises looking for affordable interest rates. Enterprises with a higher credit rating are eligible for large loans from Fullerton India. Don’t forget to decide on the right loan amount according to business requirements. Apply for an MSME/SME loan with Fullerton now! 

By sanaya

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