1. What is EMI?

EMI (Equated Monthly Installment) is the fixed payment amount made by a borrower to a lender at a specified date each calendar month. For credit cards, EMI options allow you to convert large purchases into manageable monthly payments.

2. How Does the Calculator Work?

The calculator uses the standard EMI formula:

Where:

• \( P \) — Principal loan amount (Rs)
• \( R \) — Monthly interest rate (annual rate divided by 12, in decimal)
• \( N \) — Loan tenure in months

Explanation: The formula calculates the fixed monthly payment that would pay off the loan with interest over the specified period.

3. Importance of EMI Calculation

Details: Understanding your EMI helps in financial planning, comparing loan options, and ensuring the payments fit within your monthly budget.

4. Using the Calculator

Tips: Enter the principal amount (purchase amount), annual interest rate offered by your credit card, and the repayment tenure in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How is credit card EMI different from loan EMI?
A: Credit card EMIs typically have higher interest rates than personal loans but offer convenience without additional paperwork.

Q2: Can I prepay my credit card EMI?
A: Most banks allow prepayment but may charge a foreclosure fee (usually 2-5% of outstanding amount).

Q3: What is the typical interest rate for credit card EMI?
A: Rates vary but typically range from 12% to 24% annually depending on the card and tenure.

Q4: Does converting to EMI affect credit score?
A: Timely EMI payments can improve your score, while defaults will negatively impact it.

Q5: Are there any hidden charges in credit card EMI?
A: Some banks charge processing fees (0.5-2% of transaction value) or GST on interest. Always check the terms.