SBI Credit Card Offer: EMI at 7.5% With Processing Fee Waiver

By | August 18, 2016

Waring: 7.5% rate is used to calculate the monthly repayment amount. The above rate of interest translates to 13.57% p.a. reducing interest rate and is used to calculate the amortization schedule of Flexipay.

I received this super targeted email from SBICard yesterday which was mind blowing. SBI is ready to offer 7.5% interest rate on EMI conversion of a particular transaction of mine with 100% processing fee waiver if i convert Rs.50k or more to EMI. I received this offer on Air India SBI Credit Card which i received recently. I’ve been receiving couple of EMI offers from SBI on my other SBI Signature Card as well, but it was never as attractive as this one.

EMIs at low interest rates - SBi Cards

EMIs at low interest rates – SBI Cards

SBI Credit Card EMI Offer at 7.5% Rate of Interest

How the hell!! Even housing loans are anywhere around 9.5% and this looks so much fake (It is Fake number). Maybe they have some interesting business model on high value transactions. Its understood that there will be additional 15% service tax component on this interest rate but I still wonder!

I’ve never seen such kind of low interest rates in the industry ever and had always thought HDFC has the lowest interest rates on credit card with all its Insta loan and EMI offers that they refresh from time to time. The lowest with HDFC i’ve seen in past 2 years is 11.99% with 100% processing fee waiver.

Looks like SBI is now up in captivating the EMI on credit card market which HDFC is taking advantage since long time now.

Update: 7.5% (Flat interest rate) number is used to lure customers. The actual number is 13.57%(reducing rate of interest). Good enough, but not as good as HDFC’s 11.99% which i’ve even opted for once on my Dad’s card as mentioned in above link. Thanks for everyone who put some light on this via comments. I could see how easily SBI can make people fools 🙁

While the offer is eye catching, i received it when i don’t need it. Have you ever received such offers with attractive interest rates? Do share your experiences in comments below.

22 thoughts on “SBI Credit Card Offer: EMI at 7.5% With Processing Fee Waiver

  1. a

    do not go in trap and do some calulation with mind 12*8869=106428- 99000=7428 this shows that bank says 7.5% rate but accutual rate is 13.2% understand for proof go to emi calulator and fill 99000 as principle and 12 month as tenure and interest rate as 13.4% and see the calulation i am also a card expert and knows everything very deeply

    1. Siddharth Post author

      7.5% is customized offer and i cross verified after logging into the a/c and the numbers are correct. Maybe its not a public offer to everyone 🙂

      1. a

        go to hdfc bank site and avail insta loan for 99000 for 12 month @13.4% and check emi amount and note that emi amount is same 8869 +-1

        1. Siddharth Post author

          True with HDFC, but this is SBI offer bro. Something new with SBI.

  2. a

    you say it is not a public offer this is a trap and everyone recevie this type of offer with good credit histry

  3. a

    bro i know this is sbi offer i give u example of hdfc bank and you are so smart to understand that maths principle is always same for every bank on this world i am a infinia card holder and you exactly knows the infinia value this type of offer is not come to infinia like card please reply fast

    1. Siddharth Post author

      Lemme re-confirm with SBI and update the thread 🙂

  4. Vinod Kannan

    Hey Sid, 7.5% is a flat rate of interest. It converts to 13.57% pa on reducing balance. U can see that in your Flexipay confirmation page. HDFC offers 0.99% per month on Reducing balance. So this is a useless offer

    1. Siddharth Post author

      I don’t know where i’m missing.
      To find it, i tried to convert 10k to EMI and my installment is: 895.83 INR on final page.
      896*12= 10,752 INR
      Forgetting processing fee, that’s just 752 INR which means its far less than the standard 12%(yearly) / 1%(monthly)
      Where am i missing the point?

      Maybe i’m very bad at mathematics, apologies 😀
      Lemme know, so i can update the post accordingly 🙂

  5. UK

    Consider a loan of Rs. 100 for a period of 12 months at 8℅ flat Interest and 15℅ reducing interest rates.

    A. Flat Interest:
    Rs. 100 principal at 8% flat Interest rate means Total interest payable for 12 months is Rs. 8.
    Total Payable: Rs.108.
    This can be converted to a monthly installment of Rs. 9 (9×12=108)

    B. Reducing balance:
    Using the EMI calculators, you can see that an interest of 15℅ on Rs.100 actually translates to an EMI of Rs. 9.

    So, you can see that an offer of 8℅ flat interest is pretty much the same as 15℅ interest calculated using the reducing balance method.

    1. Siddharth Post author

      OMG. SBI is playing with Flat interest rate. Never knew this. Updating thread. Thanks for the info.

  6. RAHUL Bansal

    You are missing at the point that, after paying emi for first month, you would be paying emi on 10000-895 rupees in second month and 10000-895-895 in the third month and so on and so forth. So that’s the reducing balance. So now if you calculate the interest component of each month considering 7.5% interest only than it can be calculated as

    (10000-N*X) * 7.5/12 this should be your interest component. where N is the number of month, 1st,2nd,3rd…… and X is the EMI installment.

    If you calculate the total interest by calculating through the above formula and some it up the entire year , it will come less than the 752 or to be exact 411 rupees. EMI per month would be 868 rupees per month if the rate of interest is 7.5%.

    Hope it clarifies the doubt.

    1. Siddharth Post author

      Thanks for the detailed info.
      Yes, i do understand the difference. between Floating Interest & Flat interest rate.
      Updated the post accordingly.


        Again this is not flat and floating interest rate.

        Flat rate is that interest rate which remains same through the tenure of loan, even if interest rate increase or decrease in other segments due to RBI repo rate.

        Floating interest rate is which might vary through the tenure of loan, mostly long term, 10-20 years loans, as interest rates rise or fall as per repo rate and banks pass on the same to customer.

        What CC charge are flat interest rates only, but on reducing monthly balance.
        No CC charges floating interest rates, as credit period is not long enough like 10-20 years oF CC emi.

        Hope it clarify the things more clearly.

  7. Sumit

    Hi is there is any method to convert credit card balance into cash without swipe

  8. Prem

    Tks Siddharth.

    Even today when I closely monitored it, actually its a trap.

  9. Praveen Perumalla

    On a related note, Bajaj Finserv guys fooled me with a similar trick when I took a furniture loan quoting flat interest rate of 4%. A day later my wife realized that they haven’t used the reducing balance method. One has to be very careful with the math before availing loans from these publicized offers.

  10. AB

    Hi guys, I have read your posts, thank you for the information.
    However, I have lot of confusion on this now.
    I have made a transaction of Rs.38000 on my SBI Platinum card.
    When I contact the customer support, they said it is 14.5% and later I got a message that convert your transaction into Flexiplay at an Interest of 7.5%.
    Please help me what will be my Interest now.
    Thanks in advance

    1. Siddharth Post author

      Reducing rate: 14.5% (this is what the bank has to say and this is what is charged on your outstanding)
      Effective Flat rate: 7.5% (this is what you actually pay, it is lesser as your outstanding gets reduced over time)

  11. Gunaprasad

    Hi Guys,

    I would require a piece of suggestion from experts, can I Transact amount of 100000 in to my Savings Bank A/C, what is the amount of interest rate that I would be availed, I am in a Financial glitch so I was planning to avail a credit card and transfer the amount o my Saving Bank A/C will it help me or should I get a personal any suggestions would help.


    1. Siddharth Post author

      You might need to check loan on credit card for this.


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