What happens if I pay the excess amount when there is an active EMI on credit card.

[sundarrajs]

I have an EMI of 90K(30k * 3 months), and I opted for Merchant EMI since there is more discount for it. Also, my statement was generated before EMI was processed. When I asked customer care they said since EMI is processed now(on the date I contacted), I got the money credited in the statement and I can pay only the other spends excluding EMI payment.

2 Scenarios;
1. Since the statement is generated what will happen if I pay the full outstanding?
2. Suppose if the statement was not generated and 1st EMI is posted - what will happen if I pay the full outstanding in this case

Thanks

 

[Shobhit Srivastava]

I have an EMI of 90K(30k * 3 months), and I opted for Merchant EMI since there is more discount for it. Also, my statement was generated before EMI was processed. When I asked customer care they said since EMI is processed now(on the date I contacted), I got the money credited in the statement and I can pay only the other spends excluding EMI payment.

2 Scenarios;
1. Since the statement is generated what will happen if I pay the full outstanding?
2. Suppose if the statement was not generated and 1st EMI is posted - what will happen if I pay the full outstanding in this case

Thanks

Emi works differently in credit card than all loans, as when you opt for EMI your purchase amount is reversed making a null purchase then bank creates a loan in credit card account on fixed interest for the period of EMI tenure opted on fixed percentage as decided by bank and choose by you, just like providing personal loan against your credit card limit but instead of cash you paid merchant directly, some card issuers start EMI on date of processing of transaction and some on statement dates but your credit limit is blocked for the amount of purchase, like a share of your credit limit is a personal loan for the time being as your next statements will only include a fixed amount EMI along with new purchases rather than charging interest on whole limit used with interst upto 52%/annum as in case of card overdue, so coming to point if you pay extra amount towards your account then also you will get only release of your credit limit, but the interest will be charged as it is, because you are in a contract with the bank for that amount and tenure, so if you want to close that EMI and you are ready to pay in full you will have to request for EMI cancellation and bear prepayment charges for the same, even some issuer don't easily cancel also