Own A Credit Card? Here’s How You Can Convert Your Bill Into EMI

While some banks offer no-cost EMIs, where no interest is levied on the instalment, most banks charge an interest rate

Numerous banks provide their customers with the opportunity to make substantial purchases through their credit cards via an Equal Monthly Installment (EMI) arrangement, and this scheme closely resembles traditional loans. By utilising their credit cards, customers can procure items such as high-end laptops or washing machines, with the banks making the full payment to the merchant on their behalf.

Subsequently, the customer is obligated to repay the loan through equal monthly instalments spread across a predetermined period. This arrangement offers advantages to customers, as they are not required to make the entire payment upfront; instead, it is staggered over six months to a year, or even longer, providing a broader repayment window.

While some banks offer no-cost EMIs, where no interest is levied on the instalment, most banks charge an interest rate. However, the interest rate applied to EMIs is typically lower than the card's standard finance charge. Additionally, banks may impose a nominal processing fee for converting bills into EMIs. Moreover, banks extend the option for customers to convert their existing outstanding balances into EMIs.

Convert Credit Card Bills To EMI

There are two methods for converting your bill into EMIs. You can opt to convert your purchase into an EMI at the time of buying a product, or you can convert your existing outstanding balance into EMIs.

Many merchants provide EMI options for significant purchases made with credit cards. Before making such a purchase, it's advisable to inquire about EMI options with the merchant or vendor. If you wish to convert your outstanding balance into EMIs, you can do this by accessing your account through net banking and selecting smart EMI options for credit cards. Alternatively, you can visit the nearest branch and request assistance from a bank executive to convert your outstanding balance into EMIs. Eligibility for smart EMIs is contingent upon your credit score.

How EMI Conversion Works

The EMI scheme operates by transforming your purchase or bill into a loan, which can be repaid over a duration of your choosing. Your total credit card dues or the cost of a major purchase is divided into equal instalments spread across a defined period. Consequently, instead of settling the entire credit amount at once, you repay the loan incrementally.

These instalments are determined based on the principal amount and the interest rate imposed by the bank on EMIs. Typically, the interest rate falls within the range of 13 to 18 per cent per annum. Some merchants and banks may offer no-cost EMIs, implying no interest is incurred on the borrowed amount. The interest rate tends to rise with longer loan tenures. Consequently, opting for a 12-month EMI typically incurs higher interest compared to shorter durations.

Here’s How To Calculate EMI On Credit Card Bills

The principal amount borrowed, whether for the purchase price of a product or to be converted into EMIs, serves as the base amount. Interest is then applied to this principal sum, with calculations dependent on the chosen EMI repayment period. Banks typically provide customers with a selection of repayment tenures ranging from three months to 24 months. The interest rate is contingent upon the duration of the loan, with longer tenures incurring higher interest charges.

The total sum payable, including the principal, interest, and any processing fees, if applicable, determines the overall investment. This aggregated amount is subsequently divided into equal monthly instalments based on the chosen repayment period.

EMI Calculator

You have the option to input the specific amount you desire to convert into EMIs, followed by selecting the preferred repayment period. The system utilises the bank's calculator to compute the exact EMI amount you'll be required to pay over the chosen duration. This tool facilitates the selection of the most suitable EMI plan tailored to your needs. Moreover, it enables you to conduct comparisons among EMIs offered by various banks, allowing you to make an informed decision on the optimal plan and repayment tenure that aligns with your financial preferences.