How the EMI is calculated
EMI = P × r × (1 + r)n ÷ ((1 + r)n − 1), where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12 ÷ 100) and n is the number of monthly instalments.
Example: a ₹10,00,000 loan at 11% for 5 years has an EMI of about ₹21,742 a month.
Tips for business owners
A longer tenure lowers the EMI but increases the total interest you pay. If your cash flow allows, a shorter tenure or part-prepayment saves money. Compare the total payment, not only the EMI.