Overview: About EMIs

EMI stands for Equated Monthly Installment. It is a fixed payment amount made by a borrower to a lender at a specified date each calendar month. EMIs are used to pay off both interest and principal amount, allowing borrowers to spread the cost of big-ticket items over a specific period.

When it comes to credit cards, many financial institutions and banks offer the option of converting large purchases or outstanding balances into EMIs. This facility is commonly known as "Credit Card EMIs" or "Credit Card Installments." Here's how it typically works:

Eligible transactions: Generally, only specific transactions above a certain minimum value are eligible for conversion into EMIs. These transactions may include retail purchases, online purchases, or outstanding credit card balances.

Tenure options: Lenders provide different tenure options, such as 3 months, 6 months, 9 months, 12 months, etc., depending on the lender's policies. Borrowers can choose the EMI tenure that suits them best.

Interest rate: Credit card EMIs often come with an interest component. The interest rate for these EMIs can vary from one lender to another and may depend on factors such as the chosen tenure and the customer's creditworthiness.

Processing fee: In addition to the interest rate, some lenders may charge a one-time processing fee for converting the transaction into EMIs.

EMI amount: Once the transaction is converted into EMIs, the borrower will have to pay a fixed EMI amount every month until the entire outstanding amount is cleared.

Credit limit availability: While the transaction is under the EMI scheme, the equivalent amount of credit limit will be blocked on the credit card. As you pay off the EMIs, the blocked limit becomes available again.