Pros and Cons of Purchasing Products Using an EMI Card

While EMI cards allow you to immediately purchase products on EMI, they also require repayment and usage discipline to avoid financial strain. This blog helps you understand the pros and cons of shopping with an EMI card, from enhanced purchasing power to the risk of debt accumulation. Keep reading!

Pros of Buying Products Using an EMI Card

Let’s look at the advantages of buying a product using an EMI card.

• Wide Acceptance

EMI cards are widely accepted across a vast network of online and offline retailers in India. This includes major electronics chains, e-commerce websites, and furniture stores. These cards offer great flexibility in where you can shop for your desired smartphone or home appliance.

• Flexible Payment Terms

One of the most significant advantages is the ability to choose a repayment tenure that suits your financial situation. It allows you to align your EMI outflow with your monthly budget, ensuring that the repayments do not become a burden. You can choose a shorter tenure to pay off the amount quickly or a longer one for smaller monthly payments.

• Quick Approval Process

The application and approval process for an EMI card is generally quick and straightforward. Additionally, the nature of usage makes the purchase process faster and smoother to convert the product’s price into EMI. Unlike a Consumer Durable Loan, the one-time application handles repeat approvals.

• Increased Purchasing Power

EMI cards make high-value products more accessible. Instead of waiting to save up the entire amount, you can purchase items like a premium laptop for your child's education or a new refrigerator for your home immediately. You can also buy multiple items in a row while converting the specific costs to EMI, provided they remain within your pre-approved limit. This provides better management than a lump-sum or an Instant Personal Loan.

• Collateral-free

Unlike secured loans, an EMI card also has an unsecured credit facility. This means you do not need to pledge any asset or collateral to obtain it, and the approval is based on your credit history and income, making it accessible to a wider range of individuals.

Also Read: Understanding the Maximum Credit Limit on an EMI Card: What You Need to Know

Cons of Buying Products Using an EMI Card

Let’s take a look at the disadvantages of buying products with an EMI card and the things to keep in mind.

• Debt Accumulation

The ease of converting purchases into EMIs can sometimes lead to overspending. The multiple purchases you make may accumulate more debt than intended, especially if you don’t track your monthly EMI outflows. This becomes difficult to manage, straining your monthly budget and risking missed payments or defaults.

• Missed Payments Affecting Credit Score

An EMI card affects the CIBIL score as your repayment behaviour is reported to the credit bureaus. If you miss an EMI payment or default, it can significantly lower your credit score, which will affect your ability to get loans or credit cards in the future.

• Limited Product Eligibility

While they’re widely accepted, you may not find every single product you want eligible to purchase with an EMI card. This is because lenders often have tie-ups with specific brands or may impose a minimum purchase amount to avail the facility. Ensure you visit partner retail stores for the best results.

Also Read: How to Unblock Your EMI Card Easily: Online and Offline

How to Apply for an EMI Card

Applying for an EMI card is a simple process. Here are the typical steps involved:

• Check Eligibility: Lenders have specific criteria based on age, income, and credit score. You can check your eligibility online on the lender’s website.
• Keep Documents Ready: You will generally need basic KYC documents like your PAN Card, Aadhaar Card for address proof, and recent bank statements or salary slips for income proof.
• Fill the Application: Complete the application form, either online through the lender’s website or app, or offline at a partner store.
• Verification and Approval: The lender will verify your details. If you meet the criteria, your application will be approved, and the card will be issued.

Also Read: How to Use an EMI Card for Online and Offline Shopping

To Conclude

EMI cards are a valuable financial tool for making large purchases affordable and convenient. However, it’s important to use them properly to avoid the risks of debt accumulation and a negative impact on your credit score. If you are looking to finance a significant purchase, consider the Consumer Durable loan and the PFIN EMI card from Poonawalla Fincorp.

FAQs

What is the difference between an EMI card and a credit card?

An EMI card is primarily used to convert purchases into EMIs at partner stores. A credit card offers a revolving line of credit that can be used for any transaction, with the option to convert specific large purchases into EMIs later.

Do I need a good credit score to get an EMI card?

Yes, most lenders and NBFCs review your credit score, which should be 700 or higher, before approving an EMI card application. A higher credit score indicates a good repayment history and improves your chances of approval. Besides, lenders are willing to explore EMI card options for people with low to no credit scores.

Are there any hidden charges with an EMI card?

While many lenders offer ‘No-Cost EMI’ schemes, it’s important to read the terms carefully. Some cards may have processing fees, annual charges, or late-payment and foreclosure penalties.