Is Buying Electronic Items on EMI Good or Bad?

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Electronic items are a part of our everyday life. From our mobile phones to televisions and washing machines, many electronic items are mandatory for homes, regardless of income. Most electronics cost thousands and when it comes to making payments, many buyers get confused on whether to make full payment or buy on EMI.

So, is buying electronic items on EMI good or bad?

Let us first understand EMI.

EMI stands for Equated Monthly Installments, where in the buyer will pay the principal amount along with interest incurred every month to the selller. 

For example,

  • Person A buys a LG TV for Rs 40,000 on an interest of 10% for 12 months. 
  • Principal amount – Rs 40000
  • Interest payable for 12 months (@10%) – Rs 4000
  • Total Amount to pay – Rs 44000 
  • EMI – Rs 3666.66

Instead of paying Rs 40000 in one go, the buyer pays Rs 4000 extra but the amount is divided into easy installments payable over two months. 

Is EMI good?

Imagine owning a high-end DLSR camera to capture the most beautiful images for an Instagram or Facebook page and increasing like and followers! Many buyers are hesitant to pay the large amount in lumpsum. It is here that EMI purchases become a good option for buyers. 

Makes purchases easier on the pocket. As the above example shows, EMIs payments are divided into months known as tenure. Tenures for most electronics range from three month to 12 months. Buyers can choose a tenure depending on their income and ability to repay the EMI amount. 

Option of zero-interest EMI. Many platforms offer buyers the option of buying an electronic item on the MRP. There is no interest charged. Going back to the example shared above: cist

  • Person A buys a LG TV for Rs 40,000 on an interest of 10% for 12 months. 
  • Principal amount – Rs 40000
  • Interest payable for 12 months– Rs 0
  • Total Amount to pay – Rs 40000 
  • EMI – Rs 3333.33

Helps meet aspirations. We live in an aspirational world where the smartphone or smart watches we wear determine social standing. An EMI plan helps a person with a steady income meet their aspirations of owning a trendy or world-class electronic item. 

Helps people become more social.  Platforms like Netflix, YouTuber Videos and WhatsApp messages have become central to our conversations. It is not possible to access these without smart TVs, phones, laptops, etc. Reading about a meme on a newspaper is not enough. It is important to experience it to form views and share these with others. 

Is EMI bad?

Owning an aspirational electronic item with the help of an EMI is good. However, buyers pay the EMI or face penalties. 

Pay the EMI carefully. When the EMI clock starts, it does not stop until the payment of the last EMI. Buyers should ensure that there is enough balance in their accounts to pay the EMI on its due date. 

Defaulting will lead to penalties. Buyers are happy to enjoy the electronics but defaulting on an EMI payment will lead to penalties. It is important to understand and study the penalty clause carefully before signing up for a purchase. 

Things to consider before signing up for an EMI scheme.

The above example clearly indicates that an EMI is light on the pocket. However, buyers must consider many factors before signing up for an EMI scheme. 

Is the platform trustworthy? There are many platforms offering EMI schemes. It is easy to fall into a “too good to be true” trap. Carefully evaluate and read reviews about the platform before reaching a decision. 

What is the offer? Evaluating the offer is important – is the EMI with interest or zero interest! Ask the seller detailed questions to see if there are any hidden terms and conditions. Make sure to understand each one before signing up to buy laptop on EMI

Conclusion

Now, that you have the basic information for buying electronics on EMI, we hope you will make an informed decision on your next purchase.

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