Benefits of Using an EMI Calculator for Credit Card Payments
Thinking of using your credit card to make large purchases? Are you short of cash? Make the payments in monthly instalments. Use the EMI calculator to know the payable amount. This EMI calculator helps to manage the credit card loan better. You will get information about the exact EMI amount, total interest payable, and the total repayment amount. Read on to explore how the EMI calculator can simplify managing credit card loans and support smarter financial decisions.
How to Use the EMI Calculator?
To use the EMI calculator, the following information is required:
- Principal or loan amount: The amount that must be changed into EMI
- Interest rate: The interest rate is the percentage charged on the loan. This is expressed on a yearly basis.
- Tenure: This is the period over which the EMI will be complete. This is expressed in months. The longer the tenure, the lesser will be the EMI payments
The formula is:
EMI= P x r x (1+r) n
_______________
(1+r) n-1
Here:
P: Principal loan amount.
R: Monthly rate of interest. Calculate this by dividing the annual rate by 12, then dividing by 100
N: Tenure
Example of an EMI calculator
Suppose the total loan amount is ₹1,500, and the EMI tenure is 6 months. The rate of interest is 21% p.a.
| Months | Principal | Interest | EMI | GST on interest | Final EMI |
| 1 | 239.28 | 26.25 | 265.53 | 4.73 | 270.25 |
| 2 | 243.47 | 22.06 | 265.53 | 3.97 | 269.50 |
| 3 | 247.73 | 17.80 | 265.53 | 3.20 | 268.73 |
| 4 | 252.07 | 13.47 | 265.53 | 2.42 | 267.96 |
| 5 | 256.48 | 9.06 | 265.53 | 1.63 | 267.17 |
| 6 | 260.97 | 4.57 | 265.53 | 0.82 | 266.36 |
For a loan amount of ₹1,500, the total amount payable is ₹1,905.
Benefits of Using an EMI Calculator
There are several benefits to using an EMI calculator to make credit card payments. These include:
- Clarity: The EMI calculator makes it easy to calculate the monthly payment immediately, so you know the amount payable each month and the total interest payable. The calculator also helps you compare different tenures, such as 6 months, 12 months, and 24 months, so you can select the most suitable option.
- Good for Budgeting: The EMI calculator helps to plan expenses. You know exactly how much you will have to pay in a month. You will also be able to check if the EMI fits in your budget. This avoids a financial burden.
- Smarter Decision-Making: With the EMI calculator, you can choose the tenure based on your financial ability. You can also see the difference in the EMI and interest amount between short and long tenures. The decision to pay the debt quickly with a short tenure but high monthly payment or to stretch it over a longer tenure can be taken.
- Convenience: Manually calculating the EMI or consulting a financial advisor is time-consuming. Most banks have an online EMI calculator that provides the results instantly. The calculator is available all the time and you do not have to visit the bank.
- Proper Credit Management: In case multiple of credit card apply, the EMI calculator can be used for each card. This helps to effectively manage debt. The payments can be structured across multiple cards, so no payments are missed, and you can avoid late fees or penalties.
- No Financial Surprise: The credit card EMI calculator will tell you how much interest you will have to pay over the entire EMI period. There is no unexpected expense, as you are aware of the amount from the beginning. Any hidden costs, like processing fees, are also calculated.
Conclusion
Using an EMI calculator to make payments for a credit card is an effective but very simple tool. This will help you make an informed decision and manage your finances properly. Use this tool to avoid any financial strain in the future.
Most banks offer this tool on their websites or apps, making it easily accessible. It allows you to explore different repayment options, ensuring you choose the best fit for your financial situation. With this tool, you can reduce stress, maintain a good credit score, and stay on top of your finances.
By using an EMI calculator, you can reduce stress, maintain a good credit score, and stay on top of your finances. If you're considering credit card apply, this tool can also help you plan better by estimating repayment scenarios beforehand.
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