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
• \( R \) — Monthly interest rate (APR divided by 12)
• \( N \) — Loan tenure in months
• \( EMI \) — Equated monthly installment

Explanation: The formula calculates the fixed payment amount that includes both principal and interest components, amortized over the loan period.

3. Importance of EMI Calculation

Details: Understanding your EMI helps in financial planning, comparing credit card offers, and avoiding payment defaults that can hurt your credit score.

4. Using the Calculator

Tips: Enter the purchase amount (principal), annual interest rate (APR), and repayment period in months. The calculator will show your monthly payment, total repayment amount, and total interest paid.

5. Frequently Asked Questions (FAQ)

Q1: How is credit card EMI different from loan EMI?
A: Credit card EMIs often have higher interest rates than personal loans but offer convenience and sometimes zero-interest promotions.

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

Q3: Does converting to EMI affect credit score?
A: No, but missing EMI payments will negatively impact your credit score.

Q4: Are there hidden charges in credit card EMI?
A: Some banks charge processing fees (0.5-2% of principal) and GST on interest component.

Q5: How to get the best EMI deal?
A: Compare interest rates across banks, look for promotional offers, and consider shorter tenures to reduce total interest.