If you’re struggling to make your loan EMI payments on time, you may be wondering if your credit card can help. In this comprehensive guide, we’ll explore everything you need to know about paying EMI through credit cards.
Many people face the challenge of making loan EMI payments on time, especially when unexpected expenses arise. In such situations, using a credit card to pay off your EMI may seem like a viable solution.
But is it really a good idea? We’ll cover the pros and cons of paying EMI through credit cards, the fees and charges involved, and the eligibility criteria you need to meet. By the end of this article, you’ll have all the information you need to make an informed decision about whether to use your credit card for loan EMI payments.
Table of Contents
Can We Pay EMI Through Credit Card?
Yes, you can pay EMI through credit card, but you should be aware that the service provider may charge extra fees(1-3%) for doing so. While using your credit card for loan EMI payments can be a good option in times of extreme emergency, it’s important to weigh the pros and cons before making a decision.
Pros and Cons of Paying EMI Through Credit Cards
Using a credit card to pay off your EMI may seem like a viable solution, especially when unexpected expenses arise. However, it’s important to weigh the pros and cons before making a decision.
Pros:
- Can be a good option in times of extreme emergency
- Can help improve your credit score if used responsibly
Cons:
- Service providers may charge extra fees (1-3%)
- Regular use can lead to additional fees and interest charges
When Should You Use Your Credit Card for Loan EMI Payments?
You should consider using your credit card for loan EMI payments only in times of extreme emergency, when you don’t have enough funds to make the payment through other means. Using your credit card for loan EMI payments regularly can lead to additional fees and interest charges.
Eligibility Criteria for Paying EMI Through Credit Cards
Yes, you can pay EMI through credit card, but it’s important to meet the eligibility criteria. Some of the criteria include:
- Having a credit card with sufficient credit limit
- Being a registered user of the app or platform that provides loan EMI payment facility through credit card
Can Paying EMI Through Credit Cards Affect Your Credit Score?
Using your credit card responsibly can actually help improve your credit score over time. It’s important to make timely payments and keep your credit utilization ratio low to maintain a good credit score. However, non-payment of EMI on time can lead to a lower credit score.
Different EMI Payment Options Through Credit Card
PhonePe, Google Pay, and Paytm are some of the most popular fintech companies in India that provide loan EMI payment facility through credit card. These companies allow you to pay your loan EMI through credit card with a processing fee of up to 3%. They are regulated by the Reserve Bank of India and follow strict security protocols to protect your personal and financial information.
Fees and Charges for Loan EMI Payment Through Credit Card
Fintech companies like PhonePe, Google Pay, and Paytm charge a processing fee of 1% to 3% for using their platform to pay your loan EMI through credit card. While this can be a convenient option in times of emergency, it’s important to factor in the additional fees and charges before making a decision.
How To Pay Loan EMI Through Credit Card?
Here’s how to pay loan EMI through credit card:
- Open your preferred payment app, such as PhonePe, Google Pay, or Paytm, on your mobile device.
- Go to the “Bill Payment” section within the app.
- Select the “Loan Repayment” option.
- Choose your lending partner from the list provided.
- Enter your loan number and any other required details, such as your date of birth or registered mobile number.
- The app will fetch your outstanding EMI details from the lending partner.
- Review the details to ensure they are accurate, and then click “Pay” to proceed to the payment page.
- Select a pre-saved or new credit card for payment on the payment page.
- Enter the required credit card details, such as card number, expiry date, and CVV code.
- Confirm the payment amount and click “Pay” to complete the transaction.
Which Credit Card Is Best For Loan EMI Payment?
In today’s time, there are many credit cards available that can help you pay your loan EMI. However, it’s important to choose a credit card that will help you earn more reward points or air miles in return than the processing fee paid by you.
When you pay loan EMI using credit cards through these apps, you are charged a processing fee of 1% to 3%. But, if you use a credit card that offers you more than 3% reward rate, then that credit card would be the best for this payment.
Here’s list of credit cards offering reward rates above 3%:
- Axis Bank Reserve Credit Card
- HDFC Infinia Credit Card
- Axis Bank Magnus Credit Card
- HDFC Diners Club Black Credit Card
- Standard Chartered Ultimate Credit Card
- SBI Cashback Credit Card
Note: The reward rate is subject to change from time to time by the card issuer, so we recommend that you check before making the payment.
Bottom Line
Overall, paying EMI through credit cards can be a convenient option in times of emergency, but it’s important to consider the fees and charges involved and use credit cards responsibly to avoid additional interest charges.
Fintech companies like PhonePe, Google Pay, and Paytm offer a convenient platform to pay loan EMI through credit cards, but it’s important to choose a credit card that offers more reward points or air miles in return than the processing fee paid. By keeping these factors in mind, you can make an informed decision about whether to use your credit card for loan EMI payments.
