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, this allows 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 (INR)
• \( R \) — Monthly interest rate (APR/12)
• \( N \) — Loan tenure in months
• \( EMI \) — Equated monthly installment (INR)

Explanation: The formula accounts for both principal repayment and interest payment components in each EMI.

3. Importance of EMI Calculation

Details: Calculating EMI helps in financial planning, comparing loan offers, and understanding the total cost of credit. It's particularly important for credit card purchases converted to EMIs.

4. Using the Calculator

Tips: Enter the principal amount in INR, annual interest rate (APR) in percentage, and loan tenure in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How does HDFC credit card EMI compare to ICICI?
A: Both banks offer similar EMI options, but interest rates may vary. Always compare the effective interest rate before choosing.

Q2: What is a typical APR for credit card EMIs?
A: Credit card EMI APRs typically range from 12% to 36% annually depending on the bank and tenure.

Q3: Are there any hidden charges in credit card EMIs?
A: Some banks charge processing fees (0.5-2% of principal) or GST on interest. Check with your bank for exact charges.

Q4: Can I prepay my credit card EMI?
A: Most banks allow prepayment but may charge foreclosure fees (usually 2-3% of outstanding amount).

Q5: How is EMI different from minimum payment?
A: Minimum payment is a small percentage of your total due (usually 5%), while EMI converts a specific purchase into fixed monthly payments.