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Credit card payoff.
Card interest is quoted monthly because the yearly number is alarming. Put in the balance and what you pay each month to see how long it takes and what it costs.
Cards quote 3–4% a month. That is 36–48% a year.
Shown below so you can see what paying only the minimum would cost instead.
Clear in
2 yrs 11 mos
Along the way you pay ₹74,989 in interest on a ₹1,00,000 balance.
- Months to clear
- 35
- Interest paid
- ₹74,989
- Total paid
- ₹1,74,989
- If you paid only the 5% minimum
- 20 yrs 8 mos
- Interest that way
- ₹2,27,000
How it adds up
- Balance on the card₹1,00,000
- plusInterest while you pay it off₹74,989
- equalsYou pay in all₹1,74,989
- divided by₹5,000 a month, so2 yrs 11 mos
What this assumes
A fixed balance with nothing new added. If the payment does not cover the month's interest, the balance never falls, and the calculator says so. The minimum-due comparison assumes the minimum is recalculated on the falling balance, which is why it drags on so long.
Rules and rates from
- Reserve Bank of India (opens in a new tab)
- The reducing-balance EMI formula banks use
Education only, not investment, tax or legal advice. I am not a SEBI-registered investment adviser.
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