1. What is Credit Card Loan Amortization?

Amortization is the process of spreading out a loan into fixed payments over time. For HDFC credit card loans, each EMI payment consists of both principal and interest components, with the interest portion decreasing and principal portion increasing over time.

2. How Does the Calculator Work?

The calculator uses the following formulas:

Where:

• \( \text{Outstanding Balance} \) — Remaining principal at start of month (INR)
• \( R \) — Monthly interest rate (APR / 12, as a decimal, e.g., 15%/12)
• \( \text{EMI} \) — Equated monthly installment (INR)

Explanation: The calculator first computes the fixed EMI amount, then breaks down each payment into interest and principal components throughout the loan term.

3. Importance of Amortization Schedule

Details: Understanding your amortization schedule helps you see how much interest you're paying over the loan term and how much principal remains at any point in time.

4. Using the Calculator

Tips: Enter loan amount in INR, annual interest rate (APR) in percentage, and loan term in months. The calculator will show your EMI and generate a detailed payment schedule.

5. Frequently Asked Questions (FAQ)

Q1: What is the typical APR for HDFC credit card loans?
A: HDFC credit card loans typically have APRs ranging from 12% to 24%, depending on your creditworthiness and current promotions.

Q2: Are there any prepayment charges?
A: HDFC may charge 2-4% of the outstanding amount for prepayment, but this varies by loan agreement.

Q3: Can I change my EMI amount during the loan term?
A: Generally no, EMI amounts are fixed for the entire loan term unless you opt for a restructuring.

Q4: How does the interest calculation work?
A: Interest is calculated monthly on the outstanding balance using the daily reducing balance method.

Q5: What happens if I miss an EMI payment?
A: Late payments attract additional interest charges (typically 2-3% per month) and may affect your credit score.