Oct 30th 2023
Loan
How Can I Pay Personal Loan EMI Through Credit Card? You might be wondering if your credit card might assist if you're having trouble making your loan EMI payments on time. We'll go over all you need to know about using credit cards to pay EMIs in this extensive tutorial.
Making loan EMI payments on time can be difficult for many people, particularly in cases of unforeseen circ*mstances. In these circ*mstances, paying off your EMI using a credit card could seem like a sensible option. Is it a good idea, though? Here are the benefits and drawbacks of using credit cards to pay EMIs, as well as the associated costs and levies and the requirements for eligibility. You will have all the knowledge necessary to decide whether to use your credit card for loan EMI payments by the time you finish reading this blog post.
Read More:Choose a Personal Loan Today to Manage Your Big Expenditures Easily
Is it Possible to Pay Personal Loan EMI Through a Credit Card?
Sure, you may use a credit card to pay your EMI, but be advised that the service provider may impose an additional fee (1-3%) if you do so. In an emergency, using your credit card to pay your loan's interest could be a smart move, but make sure you consider all the options before committing.
How to Pay a Personal Loan EMI Through a Credit Card?
Below is a step-by-step process of paying a personal loan EMI through a credit card.
- Choose and run a popular payment mobile application, such as Paytm, PhonePe, Google Pay, or Paytm on your smartphone.
- Visit the “Bill Payment” section on the app.
- Choose the “Loan Repayment” option.
- Pick from a list of lending partners you have taken a loan from.
- Enter your loan number and other relevant details, such as your date of birth or registered mobile number.
- You will get your outstanding EMI details from the lending partner.
- Check and verify the details to ensure they are accurate, and then click “Pay” to proceed to the payment page.
- Choose a pre-fed or fresh credit card for payment on the payment section.
- Feed in the required credit card details, such as card number, expiry date, and CVV code.
- Confirm the payment amount and click “Pay” to finish the transaction.
Also Read:Buy the Latest Smartphone Using a Personal Loan
Charges levied for paying loan EMI through a credit card
A majority of service providers that accept credit card loan EMI payments, such as PhonePe, Google Pay, and Paytm, impose a processing fee ranging from 1% to 3%. Even though this could be a practical choice in an emergency, it's crucial to consider the extra costs and charges before choosing.
Disadvantages of using a credit card for loan EMI payments
Your credit card limit is the main issue that comes up when you use it to make a payment. Should you exceed that limit, the transaction will either be declined or a penalty fee will be imposed. The availability of your credit limit decreases when you charge more on your card.
Second, failing to pay your account in full by the due date will result in greater credit card interest. You can exert some temporal control with a credit card, but only up to the payment deadline. After the due date, interest will be levied on the EMI that you have charged to your credit card. The interest rates on credit cards are always going to be greater than those on loans.
Also Read:How to Get an Instant Personal Loan Without Income Proof
Still, this is a more sensible and practical choice than taking out a second loan to pay back the first one provided you are aware of your financial situation. It offers a reasonable interest rate and provides you with some extra time to pay the EMI interest-free if it is cleared before the due date.
Credit Card Loan EMI Calculator
When paying with a credit card, there is no unique method to determine the monthly outflow. The formula for calculating the annual percentage rate (EMI) is the same regardless of the type of loan you take out—credit card, personal, mortgage, etc.
The following is the usual formula to calculate an EMI for a given amount:
P x R x (1+R) ^ N = EMI / [(N-1) ^ (1+R)]
P represents the principle borrowed from the lender.
R is the interest rate that the bank charges. This is the monthly amount required to compute the EMI, not the yearly interest rate.
N is the "tenure," or the amount of time owed on the debt. Moreover, this is in months. Pay personal loan EMI through credit card is a viable option if you understand the associated costs and manage your credit wisely. Consider the benefits and drawbacks before making a decision, and use a reliable payment app for a seamless process. Paying personal loan EMI through credit card can be a convenient solution in times of need, but it's essential to be aware of potential fees and limitations. Make an informed choice based on your financial situation and priorities. Paying personal loan EMI through credit card is a viable option if you understand the associated costs and manage your credit wisely. Consider the benefits and drawbacks before making a decision, and use a reliable payment app for a seamless process.
FAQs
Can I use a credit card to pay my mortgage?
It's possible to pay your mortgage using a credit card, but you'll probably incur additional fees. Usually, credit card payments are not accepted by mortgage lenders. You would have to find a workaround, like obtaining a cash advance, to pay using a credit card. It is not advised to do that kind of transaction as it carries an additional cost and results in an instant interest charge.
Can I use a balance transfer credit card to transfer a loan?
It is feasible to move a loan onto a credit card that allows balance transfers, albeit the card issuer may not allow this. While some credit card companies only permit credit card debt transfers, others let it as well.
Is using a credit card to pay the interest on my loan a wise decision?
It is contingent upon your unique situation. Using your credit card to make EMI payments if you are having trouble making them on time might help you stay out of default on your loan. There is no need to use your credit card if you can make your EMI payments on time without doing so.
The Conclusion
It is possible to use a credit card, particularly if you lack the money or liquidity to make the loan EMI payments. Since it allows you to purchase items until the due date, a credit card becomes suitable. You are purchasing those extra days for free if you pay this back before the deadline.
