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Credit Card Payoff Calculator
How long a card balance takes to clear at a fixed monthly payment, and the cost of paying the minimum.
LoansInputs
Cards quote monthly — 3.5% p.m. ≈ 42% p.a.
Results
Formula
- Monthly interest = Balance × monthly rate
- Balanceₘ = Balanceₘ₋₁ × (1 + i) − Payment
- n = −ln(1 − i·B/PMT) / ln(1 + i)
- Annualised rate = ((1 + i)¹² − 1) × 100
Card interest is quoted monthly and compounds monthly, so a 3.5% monthly rate is roughly 51% effective annually, not 42%. Paying only the minimum (usually 5% of the balance) barely exceeds the interest charge, which is why minimum-only repayment can stretch a balance across years. GST at 18% applies on the interest and fees.
Step-by-step Calculation
- 1.Monthly rate
3.5%3.50% - 2.First month interest
150,000 × 3.5%₹5,250.00 - 3.Principal repaid in month 1
10,000 − 5,250₹4,750.00 - 4.Payoff simulation
Bal × (1+i) − payment22 months - 5.Effective annual rate
((1 + i)¹² − 1) × 10051.1%
Assumptions
- • No new spending is added to the card.
- • Payment is made on the due date each month; no late fees.
- • GST on interest is shown separately at 18%.
Money Tips
- ◆Convert a large balance to an EMI plan — bank EMI rates (13–18% p.a.) are a third of revolving rates.
- ◆Pay the statement balance in full to keep the interest-free period alive.
- ◆Attack the highest-rate card first (avalanche method).
Warnings
- ▲Paying the minimum keeps the account current but is one of the most expensive forms of credit available.
- ▲Revolving a balance cancels the interest-free grace period on new purchases immediately.
References & Standards
RBI Master Direction on Credit Card and Debit CardGST 18% on financial services
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