What factors to consider when converting Credit Card bills to EMIs?

Credit Cards offer finances to their users and provide the liberty to make repayments in instalments at their convenience. Lately, they are the most useful financial instruments. Whether you need to make huge payments or pay in emergencies, you can use them conveniently anytime.

If you buy a product that costs more than your monthly income after applying for a Credit Card, you need not worry about repaying the amount the next month. You can easily break down your repayment amount into monthly instalments and pay it conveniently.

How to convert payments into EMIs?

Users can repay their Credit Card bill through EMIs during purchase. If they have a certain amount, they can make the down payment while converting the balance into EMIs. Credit Cards are small plastic cards you can use to make payments. The payment amount gets debited from your Bank Account after a certain period. The bank provides a Loan on the Credit Card bill amount that fits your needs.

You can repay it in parts. Before deeming you eligible for EMI conversion, they check your credit repayment history, credit scores, and current Loans.

Factors to note

• Interest rates

Banks charge interest on Credit Card bills, which are converted into EMIs. The interest rate varies and depends on the down payment amount, repayment tenure, and other factors. The shorter the tenure, the lesser the interest rates, and vice versa.

• Reducing balance

Banks usually charge interest on the EMI amount using the reducing balance method. They charge interest on the remaining balance at the end of every month, reducing the interest amount payable.

• Repayment tenures

You can select a repayment tenure between six months and two years. However, the shorter the repayment tenure, the less interest you need to pay.

• Processing fees

This is another point to consider when you use the Credit Card EMI calculator. Some banks charge a minimal processing fee for converting the credit amount into EMIs. They usually waive this fee during the festive season so that you can continue with your purchases.

• Foreclosure charges

If you accumulate the pending Loan amount, you can repay it before the end of the tenure. Some banks may charge a minimal foreclosure fee, while others may not.

Conclusion

While converting your Credit Card bills into equated monthly instalments is simple, consider the various factors involved. Not all Credit Card issuers provide EMI repayment facilities, and not all holders are eligible for them. If you opt for an EMI on your Credit Card, borrow the amount for a short period. The EMI calculator helps if you wish to compute the maximum amount you can afford to spend on your Credit Card.