1. What is the Credit Card Repayment Formula?

The credit card repayment formula calculates how long it will take to pay off your credit card balance when making fixed monthly payments, considering your interest rate. This helps you plan your finances and understand the impact of different payment amounts.

2. How Does the Calculator Work?

The calculator uses the repayment formula:

Where:

• \( P \) — Principal balance (INR)
• \( D \) — Monthly payment (INR)
• \( R \) — Monthly interest rate (APR / 12)
• \( T \) — Time to pay off (months)

Explanation: The formula accounts for compound interest and calculates how many periods (months) it will take for the balance to reach zero with fixed payments.

3. Importance of Repayment Calculation

Details: Understanding your repayment timeline helps with financial planning, shows the true cost of minimum payments, and demonstrates how increasing payments can save money on interest.

4. Using the Calculator

Tips: Enter your current credit card balance, the fixed monthly payment you plan to make, and your annual percentage rate (APR). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What if my payment is too low?
A: If your monthly payment doesn't cover the interest (D ≤ P×R), your debt will never be paid off and will continue growing.

Q2: How can I pay off my card faster?
A: Increase your monthly payment amount. Even small increases can significantly reduce your repayment time and total interest paid.

Q3: Does this account for minimum payments?
A: No, this calculates fixed payments. Minimum payments typically change as your balance decreases.

Q4: Are there fees included in this calculation?
A: No, this only considers principal and interest. Late fees or other charges would affect actual repayment.

Q5: What's a good monthly payment amount?
A: Pay as much above the minimum as possible. A good target is paying off your balance in 3 years or less.