Compare a business loan with the KFS, not just the EMI

An EMI is only one part of a borrowing decision. Use the lender’s Key Facts Statement to compare the loan term, all-in cost, fees and repayment schedule before accepting an offer.

What to place side by side

For every offer, make one comparison sheet with the sanctioned amount, tenure, interest type, repayment frequency, APR or all-in cost where shown, processing charges, insurance or other charges, prepayment terms and the total repayment from the schedule. Ask the lender if an item is unclear.

Why EMI alone can mislead

A longer tenure can lower the monthly payment while increasing the total interest paid. Fees can change the cash you receive at disbursal. A loan that looks easier monthly may not be cheaper overall or suitable for a seasonal business with uneven collections.

Example: Two ₹5 lakh offers can have similar monthly EMI. If one has a different tenure, processing fee or prepayment charge, the total cost and the cash you receive can still differ. Put both KFS documents beside the EMI result before choosing.

Stress-test your repayment

Model a weaker month, not only your best month. Keep a cash buffer for fixed operating costs, and do not assume every invoice will be collected on its due date. An EMI calculator is useful for planning, but the lender’s documents control the actual offer.

Keep the final record

Save the KFS, sanction letter, agreement, repayment schedule and communication on a single folder. Recheck the documents if the lender changes any material term before disbursal.

Use the EMI CalculatorRead the loan decision checklist

Sources and further reading

General information only; compare the lender’s current documents and take professional advice where needed.