Use Credit Card to Pay Mortgage Calculator Dave Ramsey

EMI Calculation Formula:

\[ EMI = \frac{P \times R \times (1+R)^N}{(1+R)^N - 1} \]

Monthly Payment (EMI):

Total Payment:

Total Interest:

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1. What is EMI Calculation?

EMI (Equated Monthly Installment) is the fixed payment amount made by a borrower to a lender at a specified date each calendar month. This calculator helps determine the monthly payments when using a credit card to pay a mortgage, following Dave Ramsey's financial advice.

2. How Does the Calculator Work?

The calculator uses the standard EMI formula:

\[ EMI = \frac{P \times R \times (1+R)^N}{(1+R)^N - 1} \]

Where:

$ P $ — Principal loan amount ($)
$ R $ — Monthly interest rate (APR/12 as decimal)
$ N $ — Loan tenure in months

Explanation: The formula calculates the fixed monthly payment that would pay off the loan over its term, including both principal and interest.

3. Dave Ramsey's Advice on Credit Card Mortgages

Details: While Dave Ramsey generally advises against using credit cards for mortgages due to high interest rates, this calculator helps understand the potential costs if considering this option in special circumstances.

4. Using the Calculator

Tips: Enter the principal amount, annual percentage rate (APR), and loan tenure in months. The calculator will show your monthly payment, total repayment amount, and total interest paid.

5. Frequently Asked Questions (FAQ)

Q1: Why would someone use a credit card for mortgage payments?
A: In rare cases when facing temporary cash flow issues, but this is generally not recommended due to high interest rates.

Q2: What's the main disadvantage of this approach?
A: Credit cards typically have much higher interest rates than traditional mortgages, leading to significantly higher total payments.

Q3: Does Dave Ramsey recommend this strategy?
A: No, Dave Ramsey generally advises against using credit cards for mortgage payments and recommends traditional debt repayment methods.

Q4: Are there better alternatives?
A: Yes, alternatives include refinancing, loan modification, or temporary payment plans negotiated with the mortgage lender.

Q5: How accurate is this calculator?
A: It provides accurate estimates based on the inputs, but actual credit card terms may include additional fees not accounted for here.