1. What is Loan on Credit Card EMI?

A Loan on Credit Card EMI allows you to convert your credit card outstanding into an installment loan with fixed monthly payments. This calculator helps you determine your Equated Monthly Installment (EMI) amount.

2. How Does the Calculator Work?

The calculator uses the standard EMI formula:

Where:

• \( P \) — Principal loan amount (Rs)
• \( R \) — Monthly interest rate (Annual Rate ÷ 12)
• \( N \) — Loan tenure in months

Explanation: The formula calculates the fixed payment amount required each month to pay off the loan over the specified tenure, including interest.

3. Importance of EMI Calculation

Details: Knowing your EMI helps in financial planning, budgeting, and comparing different loan offers. It ensures you can comfortably repay without straining your finances.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: What is the advantage of converting to EMI?
A: It converts revolving credit into fixed installments with predictable payments and may offer lower interest rates than regular credit card charges.

Q2: How is interest calculated on credit card EMI?
A: Interest is calculated monthly on the reducing balance, with part of each EMI going toward principal and part toward interest.

Q3: Can I prepay my credit card EMI loan?
A: Most banks allow prepayment, sometimes with a prepayment penalty. Check with your card issuer for specific terms.

Q4: Does converting to EMI affect credit score?
A: Timely EMI payments can improve your score, while defaults will negatively impact it. The loan will appear on your credit report.

Q5: Are there any hidden charges?
A: Some banks charge processing fees (1-3% of loan amount) or foreclosure charges. Always read the terms carefully.