Credit Card EMI Calculator

What is Credit Card EMI?

A Credit Card EMI allows users to convert a large purchase made with a credit card into smaller, more manageable monthly installments. Instead of paying the full amount at once, you can chose to repay the amount in parts. Your bank will provide the feature to pay the amount back over a predefined tenure with applicable interest rate.

What is a Credit Card EMI Calculator?

A Credit Card EMI Calculator is a tool that helps you figure out how much you will pay each month if you convert a large purchase on your credit card into EMIs (Equated Monthly Installments).

How it works:

When you buy a product like a laptop, phone or an appliance— you don’t always have to pay the full amount upfront. Some banks offer EMI option on your Credit Card payment. With EMI, you can break the total cost into smaller monthly payments over a set period. However, the bank charges interest on this amount, which increases the total amount you’ll pay, but helps you pay the smaller amount at the time of purchase. Here are some of the terms that you will come across:

1. Principal Amount (P):
   The total purchase amount converted to EMI.
2. Interest Rate (r):
   Annual or monthly interest rate charged on the EMI.
3. Tenure (n):
   The duration (in months) over which the EMI is paid.
4. EMI:
   The fixed monthly payment made by the user.

The EMI calculation is based on a standard mathematical formula:

Where:

• PPP is the principal loan amount
• r is the monthly interest rate (annual interest rate divided by 12 and then by 100)
• n is the loan tenure in months (loan tenure in years multiplied by 12)

Let’s consider an example to understand the calculation:

• Loan Amount (P): ₹55,000
• Annual Interest Rate: 16%
• Loan Tenure: 1 year

Step 1: Convert the annual interest rate to a monthly rate:

Step 2: Convert the loan tenure to months:

n = 1 × 12 = 12

Step 3: Plug these values into the formula:

Step 4: Calculate the EMI: