Shopping on EMI has become a popular trend these days since it allows people to enjoy the benefits of the product or service they want without hurting their wallets. However, shopping on EMI is not as simple as it seems. Before you commit to a purchase on EMI, there are a few things that you need to keep in mind to ensure that you have a comfortable repayment experience.
This ultimate guide to shopping on EMI will provide you with everything you need to know about shopping on EMI.
What is EMI?
EMI stands for Equated Monthly Installment, which means that you repay the loan or installment over a certain period of time in fixed equal installments. EMI is one of the most convenient ways to purchase a product or service without paying the full amount upfront.
How to improve CIBIL Score?
The CIBIL Score also known as Credit Score is one of the most important factors that could determine your eligibility for an EMI or installment plan. If you have a poor CIBIL score, there is a higher chance that you may not be eligible for an EMI plan or may have to pay higher interest rates. Thus, it is essential to understand how you can improve your CIBIL score. There are several ways to do so. Firstly, ensure that you make timely payments for all your existing loans or credit card bills to avoid any negative impact on your CIBIL score. Secondly, try to keep your credit utilization low. Your credit utilization ratio is the amount of credit you home centre store use as compared to your credit limit. If you have a high credit utilization ratio, it indicates that you may be overusing credit, which could result in a lower CIBIL score. Lastly, check your credit report frequently to ensure that there are no mistakes or errors that could negatively impact your credit score.
Key factors to consider before shopping on EMI
Before you decide to shop on EMI, there are a few important factors that you need to keep in mind to ensure that you do not fall into debt and have a comfortable repayment experience.
1. Check the interest rate: The interest rate is one of the most important factors that you need to keep in mind before committing to an EMI plan. A higher interest rate could lead to higher monthly installments. Hence, it is important to compare the interest rates offered by different lenders or banking institutions to ensure that you find the best deal.
2. Read the terms and conditions: Before signing up for an EMI plan, it is important to read and understand the terms and conditions of the plan. Some banks may have hidden charges or terms that could surprise you later. Hence, it is important to read the fine print and understand the terms and conditions thoroughly.
3. Check your creditworthiness: Your credit score and creditworthiness play a vital role in determining the interest rate and EMI plan you are eligible for. If you have a low credit score, it may be difficult for you to get a good interest rate or an EMI plan. Therefore, it is important to check your creditworthiness before committing to an EMI plan.
How to calculate EMI?
Calculating EMI is an essential step before committing to an EMI plan. EMI calculators are easily available online and can help you determine the monthly installments you would have to pay based on the loan amount, interest rate, and the repayment period. By using an EMI calculator, you can plan your finances better and decide on the most affordable EMI plan for you.
Benefits of shopping on EMI
1. Allows for affordable purchases: With EMI plans, you can purchase products or services that may have otherwise been out of your budget.
2. Easy repayment options: With EMI plans, you do not have to worry about repaying the entire amount upfront. Instead, you can repay the loan in fixed monthly installments.
3. Helps build credit score: Making timely payments on an EMI plan can help improve your credit score over time.
Conclusion
In conclusion, shopping on EMI can be an excellent way to afford your purchases without putting excessive stress on your finances.
The Bajaj Finserv Insta EMI Card is one such EMI instrument that offers a pre-approved loan amount of Rs. 3 lakh for cardholders. The card allows users to make purchases online or in-store and convert the payment into interest-free EMIs (Equated Monthly Installments). Users can avail the pre-approved amount and payback in easy monthly installments, without paying any interest amount.
With careful planning and consideration, shopping on EMI can be a great way to fulfill your shopping desires without breaking the bank.