The credit card EMI calculator helps you calculate your monthly EMI. EMI stands for Equated Monthly Installment, which refers to equal monthly payments. This calculator is designed to determine your EMI based on the credit card loan amount, tenure, and the interest rate charged by your bank.
How to use Credit Card EMI Calculator?
It is simple to use and takes just a few seconds. So, whether you're buying something expensive or dealing with an unexpected expense, this tool makes it easy to manage your finances.
Here’s how to use it:
- Credit card loan amount: For example, suppose you want to convert a ₹50,000 transaction into EMIs.
- Credit card interest rate: You can check your bank’s website for the exact interest rate. For reference, we’ve included the starting interest rates of top banks in the upcoming section.
- EMI tenure: Let’s say you want to repay the amount over 1 year or 12 months.
That’s it. Click Calculate. You will see the EMI amount and breakdown of the interest paid over the years.
How does EMI on Credit Card work with an example?
Credit card EMI works just like any other loan EMI. Banks use a simple formula to calculate the EMI, which includes both the principal and the interest. This fixed monthly payment is what you repay over time, and it’s called the EMI.
Let’s understand this with an example:
Mr. Ram wants to convert a ₹1 lakh purchase into EMIs for 24 months (or 2 years).
Here are the details:
- Loan amount: ₹1,00,000
- Annual interest rate: 15%
- Monthly interest rate: 1.25% (15% ÷ 12 months)
- Loan tenure: 2 years (24 months)
Based on these values, the EMI comes out to approximately ₹5,000 per month.
The EMI calculator uses a standard formula (discussed in the next section) to calculate this amount, ensuring that each payment covers both the loan amount (principal) and the interest evenly over the entire period.
The formula used in the Credit Card EMI calculator
EMIs are calculated using the following formula:
EMI = [(PV × R) / [1 - (1 + R)^-n]
Where,
EMI = Equated Monthly Installment
PV = Loan amount (Principal)
R = Monthly interest rate (annual rate divided by 12)
N = Total number of monthly payments (loan tenure in months)
Let’s solve for the example discussed earlier with this formula
So, when you solve the EMI formula, you get ₹5,000, which is the amount you'll need to pay every month for 24 months.
Benefits of Using a Credit Card EMI Calculator
So now let’s discuss the benefits of using a Credit card EMI calculator:
- Informed Decision-Making: The EMI calculator helps you make well-informed decisions by showing you key details like the EMI amount and total interest payable. You can also adjust the tenure to see how it affects your monthly payment, allowing you to choose what fits your budget best.
- No Manual Calculations: Calculating EMI manually using formulas can be tricky and time-consuming. The EMI calculator does all the work for you instantly and accurately, saving time and effort.
- Better Financial Planning: With an EMI calculator, you can plan your finances in advance. Knowing your future monthly obligations helps ensure you stay on track and avoid financial stress or surprises.
Things to keep in mind when using EMI calculator
Here are a few things to keep in mind before using the credit card EMI facility:
- Interest Rate: Different banks and financial institutions charge different interest rates, which can go as high as 40% per annum. Always check the interest rate on the credit card you're planning to convert into EMI.
- Processing Fees: In addition to interest, credit card companies may also charge processing fees (typically 1–2%), which can increase the total cost of your loan.
- EMI-to-Income Ratio: This ratio shows what percentage of your income goes toward EMIs. As a rule of thumb, your EMI-to-income ratio should ideally be below 30–40% to maintain healthy finances.
What are Credit Card EMI Interest Rates?
We have shared the starting interest rate of various banks.
| Bank/ Credit Card Provider | Interest Rate |
| HDFC Bank | 18% p.a.* | 15% p.a. onwards** |
| SBI Card | 22% p.a.* | 14% p.a. onwards** |
| Citibank | 24% p.a.* | 13% p.a. onwards** |
| Axis Bank | 18% p.a. | 13% p.a. onwards** |
| Bank of Baroda | 18% p.a. | 13% p.a. onwards** |
| RBL Bank | 13% p.a. onwards** |
| ICICI | 15.96% p.a.* | 12.99% p.a. onwards** |
| Standard Chartered Bank | Starts from 12.96% p.a.* | 13% p.a. onwards** |
* Post Purchase EMI Interest Rate
** Merchant Interest Rate
Credit card companies can charge different interest rates to users, so check the interest rate offered by the bank before opting for EMI.
Conclusion
The Credit Card EMI tool is a simple-to-use tool. It can help you manage and plan your finances better by understanding the exact EMI amount based on different tenures. We have designed the INDmoney calculator with the user's needs in mind. EMI can be a useful tool if used cautiously and when needed, and that’s why we have also shared a few things you should look out for when using the EMI facility.