How does Credit Card EMI conversion work?

When you convert a credit card purchase or outstanding balance to EMI, the bank blocks that amount from your credit limit and allows you to repay in fixed monthly installments. Interest rate is typically 12-18% p.a. plus GST, often shown as flat rate of 1-1.5% per month.

What is the interest rate for credit card EMI?

Credit card EMI rates typically range from 12% to 18% p.a. (1-1.5% flat per month). No-cost EMI means the merchant absorbs the interest. Always check the effective interest rate which is usually 20-25% when converting flat rate to reducing balance.

Is credit card EMI better than personal loan?

Personal loans usually have lower interest rates (10-15%) vs credit card EMI (15-24% effective). However, credit card EMI has no processing fee in most cases and instant approval. For amounts above Rs. 50,000 and tenure over 6 months, personal loan is usually cheaper.

What is No-Cost EMI on credit cards?

No-Cost EMI means you pay no interest - the merchant/brand absorbs the interest cost. However, you may lose cashback/reward points, and sometimes there's a hidden processing fee. Always check if product price is inflated for EMI option.

Can I foreclose credit card EMI?

Yes, most banks allow EMI foreclosure. You'll need to pay remaining principal plus 2-5% foreclosure charges. Some banks don't give interest refund on foreclosure, so check terms before converting to EMI.

Credit Card EMI Calculator 2026: Convert to EMI

What is Credit Card EMI Conversion?

Credit Card EMI conversion allows you to convert a large purchase or existing credit card outstanding into fixed monthly installments. Instead of paying the full amount in the next billing cycle (and incurring high interest ~40% p.a.), you can spread the payment over 3-48 months at a lower interest rate (12-18% p.a.).

Types of Credit Card EMI

Purchase EMI: Convert specific transactions to EMI (TV, mobile, etc.)
Outstanding EMI: Convert existing credit card balance to EMI
No-Cost EMI: Merchant absorbs interest (check for hidden charges)
Balance Transfer EMI: Transfer balance from other cards at lower rate

Flat Rate vs Reducing Balance Rate

Aspect	Flat Rate	Reducing Balance
Interest Calculation	On original principal throughout	On outstanding balance
Typical Quote	1-1.5% per month	12-18% per annum
Effective Rate	~1.8x the flat rate	As quoted
Used By	Credit card EMI, some NBFCs	Banks, housing loans

Conversion Formula: Effective Reducing Rate ≈ Flat Rate × 1.8 to 1.95

Example: 1.33% flat/month = ~24% effective reducing rate p.a.

Credit Card EMI Formula (Flat Rate)

                        Total Interest = Principal × Flat Rate × Tenure

                        EMI = (Principal + Total Interest) / Tenure

Example: ₹50,000 at 1.33% flat for 6 months:

Interest = 50,000 × 1.33% × 6 = ₹3,990
EMI = (50,000 + 3,990) / 6 = ₹8,998

Hidden Costs in Credit Card EMI

Processing Fee: ₹199-999 + 18% GST
GST on Interest: 18% GST on interest component
Foreclosure Charges: 2-5% of outstanding + GST
Lost Rewards: No cashback/points on EMI transactions
Credit Limit Block: Full amount blocked from available limit

Credit Card EMI vs Personal Loan

Factor	Credit Card EMI	Personal Loan
Interest Rate	15-24% effective	10-16%
Processing Fee	₹0-500	1-3% of loan
Approval Time	Instant	1-3 days
Best For	< ₹50K, < 6 months	> ₹50K, > 12 months

Frequently Asked Questions (FAQs)

How to convert credit card bill to EMI?

You can convert via: 1) Bank's mobile app or net banking, 2) SMS request to bank, 3) Call customer care, 4) At time of purchase (merchant EMI). Most banks allow conversion within 30 days of transaction.

What is the minimum amount for EMI conversion?

Most banks require minimum ₹2,500-5,000 for EMI conversion. Some premium cards may have higher limits. Check your card's terms or app for specific limits.

Does EMI affect credit score?

EMI itself doesn't negatively affect credit score if paid on time. However, high credit utilization (EMI blocking most of your limit) can impact score. Maintain utilization below 30%.

Can I prepay credit card EMI?

Yes, most banks allow prepayment. Charges vary: 2-5% of outstanding amount. Some banks don't refund future interest on prepayment. Check terms before converting to EMI.

Is No-Cost EMI really free?

In No-Cost EMI, the merchant pays the interest. However, check: 1) If product price is inflated for EMI option, 2) If you lose cashback/reward points, 3) Processing fee may still apply. Compare with cash price before deciding.