It is a very simple calculation of simple interest. You are paying only Rs200 extra to the Bank.Your product cost is Rs 5685 repaid in six installments.The monthly principal amount is Rs 944.The annual interest is 12% which is 1%monthly.So first month interest on Rs 5685 at 1% interest works out to Rs 56.85.Next month the balance principal is Rs4741.(5685 minus Rs 944). On this amount 1% interest is Rs 47.41. Similarly the 3rd to 6th interest is Rs 37.97, Rs28.53,Rs19.09 and Rs10.0. The total interest works out to Rs 200 if you add the six months interests. So your Bank is charging you Rs 200 extra which works out to Rs 5885. It is a good offer with simple interest and monthly flexibility in payment (EMI option). You can go ahead without any doubts.

Hi, I am first time Credit card user and trying to buy a product online on EMIs.. so the product is worth RS 5685 but if I buy it on 6 months of EMIs , It will cost me RS 980.94 per month, meaning total RS 5885.64, however I see a message while making payment which goes something like this:

'' IMPORTANT - By proceeding to pay, you agree that your Bank will charge you 12.0% interest on a reducing balance basis that will be charged over the tenure of 6-months towards this transaction. For detailed T&C, please visit www.smartbuy.hdfcbank.com/easyemi

You will pay a monthly installment of Rs. 980.94 for 6 months.

Your total cost for 6-month EMI would be Rs. 5,885.64 '''

Now my question is that if it's the only amount (980.94 for 6 months) I will end up paying or will my bank will be charging me anything extra other than this ? and I'd really appreciate if somebody could explain me in details how they came up with the amount.

Note: Original price was RS 6950 , I used a coupon and got 25 % off . also something like that was written in my credit card benefit details booklet ''Avail up to 50 days of interest free period from the date of purchase (subject to the submission of the charge by the Merchant). ''