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How Credit Card EMI Works in India

Credit Cards not only offer credit to the user but also provide them the convivence to make the repayment of that same credit in terms of installments. And lately, credit cards turned out to be the most useful and reliable financial instrument for users. If you are someone who is confused or not well aware of how credit card EMI works, then this post from Crox Times would be very beneficial to you.

Let us tell you before diving into the working structure, whether to make huge payments in emergency conditions, credit cards are a lifesaver for their users.

For instance, if you a buy product that costs more than your monthly income, using your credit card, you don’t need the repaying next month. You can easily break up the payment amount into easy EMIs as per your overall budget.

To make it simpler, if you buy furniture worth Rs 1 Lakh using your credit card and you earn 60,000 as a monthly salary, you don’t need to worry about the entire payment in the next month. You can divide the same amount of Rs 1 Lakh into easy EMIs and you can pay it at your convenience.

Alternatively, you can pay this in easy 5 installments each of 20,000 in this case. This would make your financial life easier as it would not create a hole in your pocket and you would be to buy something that is out of your reach.

Also Read- Ultimate Guide: How Credit Card Works in India

Here are a few points that you must keep your eye on these notes for a better understanding of How credit card EMI works?

  • The EMI will be calculated on various factors such as the interest rate charged by the bank, the time period taken by the user to repay the amount and down payment paid initially, and many others.
  • The Monthly EMI is charged to the user as a part of the monthly bill.
  • To figure out the amount of monthly EMI that you would be requiring the Credit Card Calculator.

How to Convert Credit Card Payments to EMI?

Users have the option to pay their bills on credit cards by converting them into Easy EMI right at the time of purchase. If you have a certain amount while purchasing then you can choose the down payment and the remaining amount can be converted into easy EMIs.

Well, the important thing to note is that converting your credit card bill into EMI depends on you. The major factor that determines this is the eligibility and whether the bank or credit card issuer authority allows the user to do the same or not.

A credit card bill is often considered a loan from a bank. The only flexibility you get here is that you can pay it as per your flexibility. So before lending you the amount. It is also important for the banks to know whether you would be able to repay the amount within the due deadlines or not. For this, the banks check your credit score, history of payments, and current loans before making you eligible to convert all your credit card dues into easy monthly EMIs.

Check Now- How Credit Card Interest is Calculated?

Factors to Note to Convert your Credit Card bills into Easy EMIs

Here are some important factors listed by our experts that you must consider before converting your credit card bills into EMIs.

  • Interest Rate– It must be noted that banks charge interest on the credit card bills that you want to be converted into EMIs. The credit card interest rate depends on bank to bank. The major deciding factors are down payment, repayment tenure, etc. The shorter the tenure, the shorter the would-be interest and vice. So, it is far better to repay the amount as soon as possible.
  • Reducing Balance Method– Mostly, banks charge interest on EMI amounts by using the reducing balance method. This means that interest will be charged on the remaining amount every month. For instance, if you have a loan of INR 50,000 and you have paid 10,000 in the first, then interest would be charged on the remaining amount i.e. Rs 40,000. In this way, the interest amount that you have to pay every month.
  • Repayment Tenure: You can choose a tenure period from 6 months to 2 years. However, make a note the shorter the repayment tenure, the lesser amount for interest.
  • Processing Fee– Some banks charge a minimal processing fee on converting the credit amount into EMIs while others do not charge any such fee. Usually, in the festive season, banks generally waive the processing fee and you can make your purchases at that time.
  • Foreclosure and Cancellation– In case you manage to pay the accumulate pending loan amount, you can repay it before your tenure ends. This refers to foreclosure or cancellation of the Loan. In such cases, there are banks that charge a minimal foreclosure fee while others may not. This all depends on bank to bank as well.

Check Now- How Credit Card Limit is Decided?

Important Points to Consider While Converting the Payable Amount into EMI.

  • Not every credit offers the convivence of converting your credit card bills into EMIs. And for those offers, the same, not every user would be eligible for this service.
  • Making EMI purchases on credit cards reduces card limits. As soon as you opt for the EMI option, your spending limit would automatically get reduced from the principal amount.
  • If possible, try to repay the amount before the due date, this best way to get rid of high interest.


While it is easy to get your credit card bills into EMI, it is also important to all the deciding factors. We hope you got the answer to your question about how credit card EMI works.

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FAQ’s Related to How Credit Card EMI works

Is it good to pay by credit card in EMI?

Well, according to experts it is too good to pay credit card dues in EMI since there would be a high rate of interest incurred on the user.

Does EMI gets deducted automatically from a credit card?

The EMI on a credit card is charged on the monthly bills, it doesn’t get deducted automatically.

How much interest does a credit card charge on EMI?

Generally, the rate of interest on credit card charges on Emi is somewhere around 12.5% per annum.

What happens if I pay EMI before the due date?

Some banks might charge a minimal amount for foreclosure, but some might not, this all depends on bank to bank.

Does EMI increase credit score?

EMI will not increase your credit although delayed payment might result in decreased credit score.


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