Minimum Due Trap
See the true cost of 5% payments
₹
₹5,000₹20,00,000
%
10%60%
If you only pay 5% Minimum Due...
You will end up paying a massive ₹1,82,042 purely in interest charges over 10.9 years!
Total Amount Paid
₹2,82,042
Original Debt was only ₹1,00,000
Time taken to clear debt:131 Months (10.9 Yrs)
Mathematical Formula
How is The Snowballing Interest Trap calculated?
Balance_NextMonth = (Balance_Current + Interest) - Max(5% of Balance, MinimumFloor)
Worked Example
Suppose you owe ₹1,00,000 on a credit card charging 42% APR (3.5% monthly). If you decide to pay only the 5% minimum due, your first payment is ₹5,000. But before that, ₹3,500 interest is added! So you effectively only reduced your debt by ₹1,500. Next month, your balance is ₹98,500, your 5% payment drops, and the cycle continues indefinitely. Result? You pay over ₹1.4 Lakhs in interest over 9.5 years just to clear a 1 Lakh debt!
How to Use This Calculator
1
Input your total outstanding credit card bill.
2
Input the card's APR (usually around 42%).
3
See the terrifying reality of what happens if you pay only the 5% Minimum Amount Due every month.