New Delhi: For many customers, purchasing high-ticket items like laptops or appliances often involves substantial financial planning. However, with the advent of Equal Monthly Installment (EMI) arrangements offered by numerous banks, the process has become more manageable, mirroring traditional loans but with added flexibility.
What Is Credit Card EMI And How Does It Work?
EMI allows customers to make significant purchases through their credit cards while spreading the payment over some time. Instead of paying the entire amount upfront, customers repay the loan in equal monthly installments. (Also Read: Explainer: Should Ultra Rich Pay Higher Tax? Check Why This Topic Is Gaining Momentum)
This method provides a broader repayment window, typically spanning from six months to a year or even longer. (Also Read: Tac Security's IPO To Open For Subscription On March 27: Check Price Band, Minimum Investment Amount, And More)
Credit Card EMI: Advantages
While some banks offer no-cost EMIs with no interest charged, most apply a lower interest rate compared to the card's standard finance charge.
Credit Card EMI: Charges
Additionally, a nominal processing fee may be imposed for converting bills into EMIs. Customers also have the option to convert existing outstanding balances into EMIs.
How To Convert Credit Card Bills To EMI?
There are two methods for converting bills into EMIs. Firstly, customers can opt for EMI conversion at the time of purchase. Many merchants provide this option for significant purchases made with credit cards.
Alternatively, customers can convert existing outstanding balances into EMIs through net banking or by visiting the nearest bank branch.
Credit Card: Eligibility
Eligibility for smart EMIs is contingent upon the customer's credit score. Once eligible, the purchase or outstanding balance is transformed into a loan, which can be repaid over a chosen duration.
Credit Card EMI: Process
The total amount is divided into equal installments, determined by the principal amount and the bank's interest rate on EMIs.
