Consumer Durable Loans vs. Credit Cards: Best Option for Festive Shopping 2025

When it comes to festive shopping in 2025, consumer durable loans are better suited for planned, high-value purchases with fixed repayment terms, while credit cards offer flexibility and rewards that work well for multiple smaller purchases. This blog will help you understand how each works, compare key features, and guide you in picking the best option for your festive shopping.

Consumer Durable Loans vs. Credit Cards: Quick Comparison

Let’s take a glance at the main points of distinction between both financing options before exploring each in detail.

What is a Consumer Durable Loan and How Does It Work?

Consumer durable loans are designed to finance purchases of appliances, electronics, and other durable goods. These loans are ideal for purchasing single expensive items such as television sets, refrigerators, or washing machines. When you avail the loan, the lender disburses the cost of the product to the retailer, and you can immediately take it home.

Monthly payments ideally equal the product’s price divided over the loan period. Approval is often quick and simple, especially for loans tied to partner stores, with minimal documentation required. The fixed EMI structure helps you plan your budget and avoid unexpected expenses, making it ideal for certain festive purchases.

Key Considerations:

• During festive seasons, many lenders offer No-Cost EMI schemes on consumer durable loans, i.e., the interest is waived or bundled into a discount offered by the retailer.
• Retailers may let you pair a few big-ticket purchases together under one consolidated Consumer Durable Loan.

Also Read: 6 Benefits of a Consumer Durable Loan You Probably Didn’t Know

Credit Cards: Flexibility and Instant Access for Shopping

A credit card offers a pre-approved revolving credit limit that can be used across various merchants, online and offline. With card spending in India showing a 12% jump from last year as per recent reports, it’s clear that more people are using credit cards for festive purchases, reflecting their growing popularity for quick and versatile payments. They offer convenience for making multiple purchases from different stores or categories without needing separate loans.

Key Considerations:

• Many credit cards have a concept called an interest-free grace period of about 45 - 50 days i.e., if you pay your full bill within this timeframe, you avoid interest charges.
• For longer repayment periods, credit cards allow you to convert purchases into EMIs i.e., interest is charged on the outstanding amount. On the flip side, the interest rates on carried balances are higher, often ranging between 30% and 48% annually.
• Cards provide benefits like reward points, cashback, and discounts on festive offers.

Also Read: Do’s and Don’ts of Using a Credit Card

Which One to Choose?

Consumer durable loans work best if you’re planning one or two high-value purchases, where a fixed repayment plan and No-Cost EMI options help you control your budget. They also ensure you don’t overspend, as the loan is tied to a specific item and a defined repayment period. The responsibility to manage your monthly finances while you pay off the loan is entirely yours.

On the other hand, credit cards are better suited for people who want the flexibility of shopping across different stores or buying multiple items. You also benefit from festive-season rewards, discounts, and cashback offers that many credit cards provide. That being said, you must show restraint in your usage of the card to avoid exceeding your credit limit or getting into too much debt.

Also Read: Key Things to Know Before You Apply for a Consumer Durable Loan

To Conclude

Choosing between a Consumer Durable Loan and a credit card depends on your festive shopping plan, item cost, and repayment preferences. Regardless of which you choose, both options have grave consequences of missed payments and defaults. Your credit score will be impacted, and your chances of future approvals drop if you do not repay on time. This is why it’s crucial to always prioritise repayments and pick a trusted lender.

If you want quick approvals and attractive Consumer Durable Loan options to support your festive spending, Poonawalla Fincorp offers easy access to funds with flexible repayment plans. Explore now on the official website!

FAQs

Can I prepay my Consumer Durable Loan without penalties?

Many lenders let you prepay a Consumer Durable Loan after you’ve cleared a minimum number of EMIs. Some charge a small prepayment fee, while others waive it during festive schemes or special offers. It’s always best to read your loan agreement carefully or check with your lender before making an early repayment.

Which has a faster approval process: Consumer Durable Loan or credit card?

If you already have a credit card, you can swipe it instantly up to your available limit with no extra steps. If you’re applying from scratch, approval could take up to a few days. Consumer durable loans, on the other hand, are often approved quickly at partner stores. Approval happens within minutes, especially during festival sales.

What happens if I miss an EMI payment on a Consumer Durable Loan?

Missing an EMI can lead to late payment charges and may hurt your credit score. This negative mark can affect your ability to borrow in the future, so it’s wise to set up auto-debit or reminders to ensure you never miss a payment date.

Can I convert credit card purchases into EMIs after buying?

Yes, most banks allow EMI conversion on transactions above a certain amount. You can do this through net banking or apps. It is usually within a few days of purchase.

Is it easier to get a loan during the festive season?

Festive seasons bring attractive offers such as No-Cost EMIs and lower processing fees, along with faster approvals at retail partner counters. While eligibility rules remain the same, lenders are generally more flexible and have more tie-ups with stores, making the process smoother for customers.