1. What is the HDFC Credit Card Interest Calculation?

The HDFC credit card interest calculation for auto purchases determines the monthly interest charged on outstanding balances. It uses simple interest based on the principal amount and monthly interest rate derived from the APR.

2. How Does the Calculator Work?

The calculator uses the simple interest formula:

Where:

• \( I \) — Monthly interest (INR)
• \( P \) — Principal balance (INR)
• \( R \) — Monthly interest rate (APR / 12, as a decimal)

Explanation: The equation calculates the monthly interest charge by multiplying the principal balance by the monthly interest rate (APR divided by 12).

3. Importance of Interest Calculation

Details: Understanding monthly interest helps cardholders plan repayments, avoid debt traps, and compare financing options for auto purchases.

4. Using the Calculator

Tips: Enter the principal balance in INR and APR in percentage. For example, for ₹50,000 balance at 36% APR, enter 50000 and 36.

5. Frequently Asked Questions (FAQ)

Q1: How is APR different from monthly interest rate?
A: APR is the annual rate, while the monthly rate is APR divided by 12. For 36% APR, monthly rate is 3%.

Q2: Does HDFC charge compound interest on credit cards?
A: Yes, interest is typically compounded monthly on outstanding balances after the grace period.

Q3: Are there special rates for auto purchases?
A: Some cards offer lower rates or EMI options for auto purchases - check with HDFC for current offers.

Q4: How can I reduce interest charges?
A: Pay the full balance before the due date or convert to EMI for fixed interest payments.

Q5: Does this include other fees?
A: No, this calculates only interest. Additional fees like late payment charges may apply.