From furniture to groceries, denim to durables everything is available on EMI today. Easy EMI, EMI card, and EMI on credit card are used by more and more people nowadays. Do you think you should use an EMI facility given by merchants? Well before getting an answer of this question let’s first understand what is the difference between Easy Finance, EMI card or EMI on Credit Card.
What is Easy Finance Option?
Easy Finance is an option offered by a merchant on various products. Easy Finance option allows you to purchase a product on EMI. The interest rate applicable on easy finance EMI is very low in some cases finance is offered even at 0%. However, under easy finance you need to pay a substantial amount as a down payment and remaining amount will be converted to EMI.
For example – You buy a home theater system worth Rs.21,000 and opt for easy finance option. Here, you are likely to pay around Rs.5000 (estimated) as a down payment. The remaining amount will be converted to EMI. The tenure and interest rate depends on the finance company.
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What is EMI Card?
The EMI card is a simple plastic card that gives you pre-approved, interest-free loan to buy your favorite product with a simple swipe. This card is provided by Bajaj Finserv. This card can be used at around 25000 stores across India. The loan amount offered by EMI card varies from Rs.30,000 to Rs.3,00,000.
For Example – If you are planning to buy a smart phone of Rs.16,000 in easy finance option you need to make a down payment from your pocket. In addition to that, you need to pay additional interest also.
If you make a similar purchase using your EMI card you just need to swipe your card. No down payment is required. You can clear your dues of Rs.16,000 in four equal installments of Rs.4000. You need not to pay any additional interest. It will be totally no-cost EMIs.
The EMI card is not totally free, but it is affordable to anyone. You just need to pay Rs.399 one time fee to avail this card. If you default for the longer duration penalty is applicable.
How to get EMI Card?
You can apply for Bajaj Finserv card online via EMI card portal. You need to submit photo ID, Address proof and cancel cheque. Along with these documents, you need to pay Rs.399 one time fees for the card.
The EMI card makes every product affordable.
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What is EMI on Credit Card?
The third option is to purchase a product on credit card EMI. Under this option, you need to pay credit card company in equal parts. This option is generally available at the time of purchase. However, some banks offer this facility at a later stage also. You need to pay additional interest when you opt for EMI on credit card. The interest rate here is likely to be lower compared to the interest rate on credit card.
For example – Suppose you purchase a split AC of Rs.35,000 and opt for EMI on credit card. Suppose you opt for 6-month installments, where bank charges a flat interest rate of 15% along with Rs.500 processing fees.
Purchase amount – Rs.35,000/-
Interest rate – 15%
So, total EMI amount – 35,000 + 15% x 35,000 = 35,000 + 5,250 = Rs. 40,250
So, for split AC of Rs.35,000 you need to pay additional Rs.5,250 if you opt for EMI on credit card.
After understanding all these options let’s make a final comparison that will help us to reach to final conclusion.
Looking at the final comparison given above it is clear that Easy Finance and EMI card are a highly recommended option. However, make sure there are no hidden cost while purchasing products via these options. Make sure not to use EMI on credit card for buying any product.