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A credit card is a wonderful financial tool when used the right way. It helps you finance expensive purchases without affecting your savings. As far as repayment goes, you can settle a credit card debt in equated monthly instalments (EMIs). You can do it by turning the credit card debt into a loan and repaying it in EMIs.
This technique of paying off credit card debt also has little influence on your credit score. The only negative is that you will need to pay extra money when you convert the credit card bill into EMIs. You will not have to pay any interest if you pay your entire account before the due date. But if you transfer the sum into EMIs, pay both the bill and the interest.
Having learned an alternative to regular credit card payment, let us see how to convert a credit card bill to EMI. Banks such as IDFC FIRST Bank are perfect when you need to convert your credit card payments into an EMI mode of paying.
When you want to transfer your credit card payment into EMIs, sign into your Net Banking account and select the right options. You can also make EMI payments by calling the credit card provider's customer service number or visiting the credit card provider’s office.
Also, you have the option to pay your entire bill in EMIs or convert certain transactions into EMIs. When you switch credit card debt into EMIs, your credit card bill gets broken into smaller EMIs.
The EMI contains a percentage of the principal and interest, which you must pay each month until the credit card account is paid in full. In addition, the bank or card provider temporarily restricts or blocks the credit by the amount of the bill turned into EMIs. When you repay your EMIs, your credit card limit is accumulated by a value equivalent to the EMI paid.
Now that we know how to convert credit card payment to EMI, let us delve a little further into its workings. Whilst some banks provide interest-free EMIs, many banks levy an interest rate. In EMIs, though, the interest rate is less than the card's interest amount.
You can turn your bill into EMIs in two ways. You have the option of converting your purchase into an EMI at the time of purchase or converting your outstanding amount into an EMI later. Verify with your retailer or seller for EMI alternatives before making a large purchase. If you wish to transfer your dues into EMIs, sign into your account using Net Banking and select smart EMI choices for credit cards.
Alternatively, you can go to your nearest branch and ask a bank representative to assist you with converting your outstanding debt into EMIs. Your credit score determines whether you are qualifying for smart EMIs.
Banks may impose a small processing fee to convert your bills into EMIs in some situations. Customers can also convert their existing debt into EMIs through their banks.
The principal loan amount is the cost of the commodity bought or the amount to be turned into EMIs. Interest applies to this formula. The estimate depends on the time you want to pay for your EMIs. Customers can normally choose from tenures ranging from three months to 24 months when dealing with banks. The interest rate will fluctuate according to the loan's term. The more the interest rate imposed on the loan, the lengthier the term.
IDFC FIRST Bank offers a low rate of interest when converting your credit card payments into EMIs. You can visit the website and look at the competitive rates they are offering. If you wish to escape paying the higher rate of interest and pay your credit card dues before time, you can also take out a personal loan with IDFC FIRST Bank and pay the sum in whole.
The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.