# How Does Emi On Credit Card Work?

## How does EMI work in credit card with example?

EMI on credit cards works in a simple way. If you are purchasing a product which is more than Rs. 10,000, for example, an electronic appliance, furniture, vehicles, etc. The EMI will be calculated depending on the rate of interest charged by the bank, the tenure you choose and the down payment which you provide.

## What if I pay my credit card EMI early?

Banks or card issuers may charge you a pre- payment fee if you wish to clear your dues before the end of the loan EMI tenure. Moreover, you may also have to pay off the interest on a pro-rata basis. This means that you need to pay the accrued interest until the day on which the EMI ( loan ) account is closed.

## How is EMI deducted from account?

Banks usually take 2-4 days to process the EMI. It will initially deduct the whole amount from your credit/debit card and within 2-4 days, the entire amount excluding any down payment amount will be credited back to your card and converted into EMI.

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## Can I pay credit card EMI at once?

Repaying all EMIs at once is known as pre-closing the loan account. The loan officer will also intimate you of any pre-closure charges or penalties. Pay the entire balance amount (sum of all pending EMIs + preclosure charges, if any) using a cheque or DD.

## How is EMI amount calculated?

The mathematical formula to calculate EMI is: EMI = P × r × (1 + r)n/((1 + r)n – 1) where P= Loan amount, r= interest rate, n=tenure in number of months.

## What are the hidden charges in no cost EMI?

Under the three-month EMI plan, the interest rate charged is 15 per cent and you would have to pay an interest amount of Rs 2,250. Interest is added to product cost.

Actual Cost of the product Rs 15,000
Offer Price under Zero Cost EMI Scheme Rs 17,250
Total Cost to be paid by you via EMI Rs 17,250

## How can I settle my credit card EMI?

Try to settle the outstanding amount, including your EMI, in full every month. If you need more than three months to repay the outstanding, opt for EMIs. If you need less than three months, then you should avoid EMIs, as revolving credit can multiply your debt quickly.

## Can I pay EMI before due date?

Yes, you can pre – pay the loan amount at any time in full or part without any additional charges. Please ensure EMIs are paid on time and pay only additional payment above EMI if your ECS mandate is active when you are paying close to the due date.

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## What if I pay more than EMI?

Yes, you can pay more than the regular EMI. The excess amount will not only decrease your principal outstanding, but also reduce your interest burden. You can pay one extra EMI ( than the usual number of EMIs) every year. This is an effective way to reduce your loan tenure, and in turn to lower the interest cost.

## What happens if EMI is not deducted?

When the EMI amount is not deducted on the action date then you will be charged a late fee or interest. One reason could be when the EMI date falls on a holiday. In that case it will be debuted the next day and if not the next day, within the same month.

## Will EMI get deducted automatically?

EMI’s or Equated Monthly Instalments are the best way to pay for all your expensive purchases over a reasonable tenure. Once your Savings or Current Account which is linked with your Debit Card is linked with the portal, your monthly payments will be deducted automatically.

## Why EMI is not deducted?

Will the payment not be deducted from my account? A: The RBI has only allowed banks to allow a moratorium. Individual banks will have to allow suspension of EMIs. This means that unless you have specific approval from your bank, your EMIs will still be deducted from your account.

## How can I pay my full EMI?

When you make a purchase using your credit card, you can make its payment by any of the following ways:

1. Make the full payment of the card on the due date.
2. Make a part payment and pay interest on the unpaid amount till it is repaid.
3. Pay the outstanding amount in EMI.
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## How do I convert my monthly outstanding to EMI?

In case you want to convert your outstanding into EMIs, you can do so by logging on to your account through net banking and opting for smart EMI options for credit cards. Alternately, you can visit the nearest branch and ask your bank executive to help convert you’re outstanding into EMIs.

## Can I cancel credit card EMI?

EMI transaction requests, once submitted, cannot be cancelled /modified/reversed until the same have been approved/rejected by the issuing banks of the credit card holders.

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