Credit Card: You need to know what happens if you don’t pay the balance on your credit card by the deadline. In fact, exorbitant interest may be owed in this kind of circumstance. EMI for credit cards People assume that when “No Cost EMI” is offered in place of full payment, it simply means they will only need to pay that amount for the item. Other than this, there will be no additional fees.
Hidden Charges Unveiled
However, this doesn’t take place. “No Cost EMI” frequently has a price. If you choose to use this facility without knowing about it beforehand, making the credit card EMI payment could cause your heart to race. You need to know what happens if you don’t pay your credit card debt by the deadline. In fact, exorbitant interest may be owed in this kind of circumstance. The annual interest rate for this loan is up to 42%. But did you know that there’s an additional 18% charge on top of the interest that’s stated in the credit card EMI? Let’s examine the reasons behind this.
GST Impact on Credit Card EMIs
In reference to Goods and Services Tax (GST) on standard credit card EMIs, you might be required to pay GST on the interest that is applied to the balance of your credit card. In addition, most financial institution services are subject to GST. This also includes interest charged on credit cards, which is subject to an 18% GST. The interest on credit card transactions is subject to this GST. The total interest will be 23.6 percent if the EMI is paid with 20 percent interest and 18 percent GST added.
No-Cost EMI Explanation
Let’s now examine the EMI “No Cost” option. When you have a no-cost extended payment plan (EMI), the bank that issues the credit card actually charges interest; however, the retailer that is selling the goods gives you an instant discount in the amount of interest that will be charged over the course of the EMI. It says that this EMI is free for you because of this.
Limited Discount on Interest
However, the interest on the EMI is typically the only amount discounted, not the GST associated with that interest. For instance, if the annual interest rate on your credit card installment loan is twenty percent, you will also be required to pay eighteen percent (or 3.6 percent) of the total amount owed in GST on that interest. In addition, there’s a chance you’ll be required to pay additional funds in the form of a processing fee or other fees.
Keep watching our YouTube Channel ‘DNP INDIA’. Also, please subscribe and follow us on FACEBOOK, INSTAGRAM, and TWITTER.