In recent times, various merchant outlets and e-commerce shopping sites are offering EMI finance options to ease out the financial burden on customers. This facility allows individuals to purchase products without making any upfront payment. The required payment can be made through Equated Monthly Instalments spread over a pre-decided tenure.
Such a facility would significantly help you meet your needs without exhausting your monthly budget. However, similar to any other credit facility, there are a few things to consider while opting for EMI facility. Find about them below:
1. Compare fees and charges
EMIs are subject to fees, such as interest rates, processing fees, prepayment or foreclosure charges, and so on. While the processing fee is a one-time charge that can range from 0% to 3% of the loan amount, foreclosure or prepayment charges apply if you want to close your EMIs completely or partially before the loan term. Interest is also charged on EMIs, which varies depending on the card issuer.
However, with no-cost EMIs, these fees are either waived or balanced in the form of a discount, resulting in a total EMI that is equal to the product’s price.
If you have multiple cards and want to make a new purchase, you must always compare the rates on all of your cards and choose one with the lowest rate. You can also see if any of the cards provide a special discount or no-cost EMI with the merchant.
2. Select the right tenure
Credit card companies typically offer a lower interest rate for a longer tenure. However, before choosing a longer term, you must first calculate the amount of interest you will have to pay over that time period.
For example, suppose you use your credit card to avail an EMI of Rs.12,000. The interest rate for a 3-month term is 25%, while the rate for a 12-month term is 20%. If you choose the lower rate of 20% with a tenure of 12-months, you will end up paying more in interest.
As a result, you must choose the tenure carefully, as a lower interest rate on a longer term does not always imply that you will save money.
3. Assess the loss of rewards
In general, credit card companies do not offer reward points or additional discounts on EMI transactions. In such cases, you should always consider the value of lost reward points or cashback, as well as the discount you would have received if you had not chosen EMI conversion. If you can save more money by taking advantage of non-EMI offers, you should reconsider the EMI option.
Besides, some card issuers offer some number of rewards or cashbacks when you use your transactions to EMIs. Thus, you must assess these offers on cards and utilise them efficiently.
4. Credit limit
Keep in mind that when you choose a credit card EMI, the transaction amount is subtracted from your credit limit. However, as you make payments on your EMIs, the amount adds to your available limit. While the available credit limit is topped-up as you pay the EMIs, it significantly goes down at the time of purchase. This means you will have a lower credit limit for future purchases.
Moreover, you can make EMI purchases without a credit card. This would require you to obtain an EMI card from platforms such as Bajaj MARKETS. The EMI Network Card comes with a pre-approved loan offer of Rs.2 Lakhs that you can use to purchase various products, ranging from fashion items, electronics to
In case you ever have to change your mobile phone, you will also have to get it reflected on your Bajaj Finserv registration. Therefore, it would help if you know how to change Bajaj Finserv registered mobile number.
Steps to Apply for an EMI Card
You can obtain an EMI card online by following these steps:
Step 1: Click on ‘Apply Now’ on the official Bajaj MARKETS website
Step 2: Enter your mobile number, profession, date of birth, PAN details and more
Step 3: Accept the terms and conditions and proceed
Step 4: Validate your transaction through OTP verification
Upon viewing your EMI card offer, you will have to go through one more step, that is the KYC verification. Additionally, you will have to pay a minimal application fee to complete the process.
How to Make Purchase through an EMI Card?
Upon obtaining the EMI card, you can conveniently make purchases on EMI by following these steps:
Step 1: Visit a partner website and choose the product of your choice
Step 2: Proceed to purchase and before checking out choose the EMI option
Step 3: Assess the monthly payments and choose a tenure as per your repayment capacity
Step 4: Fill the necessary details
Step 5: Complete verification to confirm purchase
EMI financing has become one of the most sought-after options in recent times. With no-cost EMI option, customers do not even require to pay the interest along with the payments. However, considering the above-mentioned factors would help you make informed decisions as you purchase high-value products.
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