EMI schemes have become increasingly popular over the last few years, with more and more people taking advantage of this opportunity to purchase electronic items, home appliances, furniture and even mobiles on EMI.
You can return the due amount in three ways: First, payment of the entire amount before the due date avoids interest charges. Second, paying a portion of the amount owing and carrying the rest for an extended period with an interest rate is possible. Third, the option of returning the money using EMIs to repay the debt is also available.
Overview of EMI schemes
EMI schemes provide cardholders with the facility whereby they can pay off their outstanding debts in smaller, more affordable installments over time. In addition, you can use cards, such as the Bajaj Finserv Insta EMI Card to make purchases in two instances.
Purchasing expensive product
Many credit cards allow you to break up large purchases into affordable EMIs. It is possible to spread the cost of the product in monthly installments rather than paying the complete cost upfront. As a result, the big-ticket purchases can easily be paid for within the next few months.
Overall credit card balance
You can also convert your credit balance or outstanding amount into EMI to an affordable payment plan. You can restore your entire credit card bill into instalments instead of converting a specific purchase into EMIs.
How do EMI schemes work?
You may request your issuer to convert the purchase into affordable EMI. You can choose how long you would like to pay the EMIs. You will make an initial down payment, and the remaining amount will be converted into EMIs for your credit card. It also works the same way to convert the entire credit card bill into EMIs. Your credit card issuer converts your outstanding bill into monthly EMIs so you can pay it easily.
Considerations before choosing an EMI scheme
Availability of credit
When using EMI schemes to purchase your favourite products, it is essential to keep enough credit on your card. Whenever you decide to convert your purchase into EMIs, keeping more than or at least equal amounts is preferable. You will not be able to apply for EMIs if you cannot meet these requirements.
You may have to pay an interest charge if you choose an EMI plan. In addition, there is usually a fee associated with the conversion into EMIs that will vary depending on the amount you wish to convert.
Tenor of repayment
Credit card issuers set out a schedule for the repayment of the EMIs over a certain period. A wide range of durations can be utilised, ranging from a few weeks to a year.
EMI is not available to all customers who have credit cards. A credit card issuer will assess your credit score, income, credit limit, and behaviour before providing the facility for an EMI conversion. Your eligibility will also determine how long you have to repay the loan and how much you can convert to the loan.
Best way to use EMI schemes on credit cards
Make a lower tenor choice
If the loan tenor for a product such as a mobile on Bajaj EMI Card is higher, the more you’ll be able to spend on interest for that loan. However, it would help if you chose a minimum tenor to assist you in repaying the loan within a reasonable period.
Keep an eye out
It is becoming more popular to have credit cards that offer EMI options without processing fees, especially during the holiday season.
Read the Terms & Conditions
There is no penalty for pre-closure with any of the cards. However, before making any decisions, you should be aware of the terms and conditions of pre-closure.
Don’t be afraid to ask
EMI is not the best option for getting the available cash discounts, especially during the festive season. Many retailers offer discounts on products only available with cash or a credit card. However, the holiday season brings good cheer and generosity, so you may get lucky if you ask the retailer for discounts.
You can reduce the debt you are burdened with and maintain your credit score with an EMI offer for your credit card. Choose the EMI facility if you make a big purchase, such as a smartphone on the Bajaj Finserv Insta EMI Card. By taking out this loan, you can consolidate your debt and pay it off at attractive interest rates. Hence, it would be best to make wise choices so you do not default on your obligations.