Loan on Credit Card Emi Calculator
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Reviewed by Calculator Editorial Team
Taking a loan on a credit card is a common financial strategy to access funds quickly. Our EMI calculator helps you estimate the monthly payments, total interest, and repayment period for a loan taken on a credit card.
How to Use This Calculator
To calculate the EMI for a loan on a credit card:
- Enter the loan amount you want to borrow.
- Specify the interest rate (APR) offered by your credit card.
- Enter the loan tenure in months.
- Click "Calculate EMI" to see the results.
The calculator will display the monthly EMI, total interest payable, and total repayment amount.
How the EMI Calculation Works
Equated Monthly Installment (EMI) is calculated using the formula for the monthly payment of a loan with compound interest. The formula is:
EMI = P × r × (1 + r)^n / [(1 + r)^n - 1]
Where:
- P = Principal loan amount
- r = Monthly interest rate (APR/12/100)
- n = Loan tenure in months
The EMI calculation takes into account the compounding effect of interest over the loan tenure. The total interest payable is the difference between the total repayment amount and the principal loan amount.
Note: The interest rate used in the calculation is the Annual Percentage Rate (APR) divided by 12 to get the monthly rate. The loan tenure is specified in months.
Worked Example
Let's calculate the EMI for a loan of $10,000 at an APR of 15% for 2 years (24 months).
| Parameter | Value |
|---|---|
| Loan Amount (P) | $10,000 |
| APR | 15% |
| Monthly Interest Rate (r) | 15%/12 = 1.25% |
| Loan Tenure (n) | 24 months |
Using the EMI formula:
EMI = $10,000 × 0.0125 × (1 + 0.0125)^24 / [(1 + 0.0125)^24 - 1]
EMI = $10,000 × 0.0125 × 1.3069 / (1.3069 - 1)
EMI = $10,000 × 0.0125 × 1.3069 / 0.3069
EMI ≈ $10,000 × 0.0533
EMI ≈ $533.33
Total repayment amount = EMI × n = $533.33 × 24 ≈ $12,800
Total interest payable = $12,800 - $10,000 = $2,800
Frequently Asked Questions
What is the difference between APR and EMI?
APR (Annual Percentage Rate) is the annual interest rate charged on the loan, while EMI (Equated Monthly Installment) is the fixed monthly payment amount that includes both principal and interest.
Can I pay off the loan early?
Yes, you can pay off the loan early, but it may result in paying more interest than if you had paid the full EMI. Some credit cards offer prepayment privileges that allow you to pay off the loan without paying additional interest.
What happens if I miss an EMI payment?
Missing an EMI payment can result in late fees, additional interest charges, and may negatively impact your credit score. It's important to make timely payments to avoid these consequences.
Is it better to take a loan on a credit card or a personal loan?
The choice between a credit card loan and a personal loan depends on your financial situation. Credit card loans typically have higher interest rates, while personal loans may offer lower rates and better terms. Compare the interest rates and fees before deciding.