At times, the remuneration and salaries people receive are not always enough for them to fulfill their wishes and ambitions. Then, should we stop dreaming and desiring? Here, we have the best solution for achieving your dreams and wishes. Make a purchase through a credit card and repay the amount in small installments every month. This will not only help you fulfill your desires but also allow you to avoid worrying about credit card bill payments. This article will give you an overview of the EMI system and how the monthly payments are calculated.
What Is The Concept Of Credit Card EMI?
Credit Card monthly installments mean splitting the bill amount into smaller amounts and repaying them monthly rather than the whole sum in a single payment. This concept has become quite popular amongst the younger generation, keen to make their dreams come true. The method is incredibly convenient in this present era of extreme price hikes.
The approach in most banks operates in two major ways,
- Converting The Outstanding Dues
You either complete the service or product purchase via card payment and then convert the dues into monthly payments rather than clearing the entire amount in a single payment.
- Splitting The Purchase Amount
The second is to choose the monthly payment option during the purchase of the service or the product itself so that you do not have to use up the entire credit immediately.
How Are The Instalments Calculated?
The credit card EMI is calculated by subtracting the down payment from the total amount. The remainder is multiplied by the interest rate, tenure, and processing fee; the result is your monthly installment amount. However, using the credit card EMI calculator, you can opt for a hassle-free way to calculate them. All you do is put in the loan amount and the tenure, and within seconds, you will get to know the amount for your monthly installments.
Things To Consider While Opting For Credit Card EMI
Before you opt to convert your bill amount into EMI, there are a few things you need to consider, such as
- Interest Rates
Different banks offer different interest rates on the EMI; hence, thoroughly checking through the interest rates offered is very important. Choosing a shorter tenure will help keep the interest rates considerably lower. The rates also depend on the history of previous payments. If issuers find that the applicant does not always pay the installment within the given time, they may levy a higher interest.
- Processing Fee
There are several banks that charge a processing fee when you convert the outstanding amount to EMI. However, several banks do not have a processing fee. While researching, choose such banks to keep the loan amount lower.
- Repayment Tenure
This is the loan term within which you must repay the entire amount. The tenure varies with banks. However, the common tenure ranges from a few months to years based on the loan amount, monthly income, etc. Make sure to choose a convenient tenure to repay the loan comfortably. However, keep the loan term manageable, as a longer tenure will come with a higher interest rate.
Advice on How to Handle Your Credit Card EMIs
- Prepare a Purchasing Plan: If you want to minimize excessive debt, you should only convert purchases that are required and high-value into EMIs.
- Compare Offers: The conditions and interest rates that are offered by various credit card providers might vary significantly. Before settling on a choice, compare these two options.
- Pay on Time: Please make sure that you pay your installments on time in order to avoid incurring late fees and penalties.
- Be Aware of Your Credit Limit: Converting purchases into installment payments can lower the amount of credit that is accessible to you. Maintain a record of your expenditures in order to prevent going over your budget.
Conclusion
The credit card EMI is an approach that comprehends the predicaments of the common people very well and thus helps them fulfill their ambitions comfortably. Hence, get your instant credit card at the earliest to maximise the benefit of monthly installments.
Credit card (EMI) can be a useful choice for managing big purchases without putting a burden on your finances provided you follow the appropriate planning and management procedures.
