KreditBee’s credit card EMI calculator is a simple yet powerful tool for estimating monthly instalments before converting credit card purchases into EMIs (Equated Monthly Instalments). Factoring in the purchase amount, interest rate, and repayment period provides a clear picture of your financial commitment.
When you convert a credit card purchase into EMI, the total amount is divided into equal monthly instalments, which include both the principal amount borrowed and the interest charged. The interest rate, also known as the credit card EMI interest rate, varies depending on the card issuer and the specific offer you choose.
Year | Principal (A) | Interest (B) | Total Payment (A + B) |
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For individuals considering credit card EMIs for purchases, understanding the calculation process is essential. This knowledge empowers informed financial decisions about affordability and repayment terms.
Using our credit card loan EMI calculator:
The EMI calculator will then display the estimated instalment, total interest payable, and the total amount you'll repay over the chosen tenure.
The traditional method for calculating EMIs relies on a specific formula that factors in:
The formula for calculating the monthly EMI (E) is as follows:
E = [P x R x (1 + R)^N] / [(1 + R)^N - 1]
Example
Let's say you take out a personal loan with the following terms:
P: ₹50,000 (Principal Loan Amount)
Annual Interest Rate: 12%
N: 24 months (Loan Tenure)
Calculations
Calculate Monthly Interest Rate (R):
R = 12% / 12 months = 1% per month
Convert to decimal: R = 0.01
Apply the EMI Formula
E = [50000 * 0.01 * (1 + 0.01)^24] / [(1 + 0.01)^24 - 1]
E = [500 * (1.01)^24] / [(1.01)^24 - 1]
E = [500 * 1.2697] / [0.2697]
E = 634.85 / 0.2697
E ≈ ₹2354.17
Result
Your monthly EMI for this loan would be approximately ₹2354.17.
Important Note: This is a simplified example. In reality, EMI calculations can be more complex due to factors like processing fees, prepayment charges, and varying interest rate types (fixed or floating).
While this formula provides an accurate calculation, it can be cumbersome for quick estimations, especially when considering various repayment terms.
Our credit card EMI calculator goes beyond the basics, offering additional features to empower your financial planning:
Credit card EMIs can be a valuable financial tool when used wisely. By utilising a credit card EMI calculator, you can make informed decisions, plan your finances effectively, and enjoy the benefits of EMIs without falling into a debt trap.
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