Forget the Credit Card: Buy Your New Smartphone On EMI Finance

The trend now, especially among the youth, is to own the latest model of a high-end smartphone. A smartphone helps you accomplish a number of tasks while you’re on the move; you can read, conduct your financial and banking transactions, listen to relaxing music, play games, interact on social media, and even get done with your office work during the commute.

All these benefits, along with the technological upgrades that have opened up a world of possibilities, has resulted in the growing popularity of smartphones.

Today, everyone wants to own a smartphone with high utility, but most people aren’t equipped with the financial means to make the purchase. If you’re in a similar situation, financing your phone with the help of EMIs is the solution.

The technology giant, Apple, was the first to introduce the concept of EMIs for the purchase of its iPhones and iPads. This move improved the sale of Apple products in India and the mode of payment was soon adopted by other mobile manufacturers as well.

The smartphone revolution has even penetrated rural and semi-urban areas, where the use of credit cards is highly limited, as most people residing in these areas can’t afford it. Due to the absence of sufficient funds to make an upfront payment, and without having the means to use a credit card, buying a new smartphone becomes a difficult task.

But all of this has changed, because you can now buy Mobile on EMI without credit card online.

What Do You Mean by EMI?

Equated Monthly Instalment (or EMI) is a fixed amount that you, as the borrower, pay to a lender on a particular date of every month.In simple terms, it is a method where you can make staggered payments over a specific period of time. The EMIs are made up of an interest component as well as the principal amount of the loan, and once you finish repaying all your EMI’s, your loan account will be closed.

Why Should a Credit Card be Avoided?

While a major chunk of the population holds a bank account, most of them aren’t equipped to use a credit card. Not everyone in India is comfortable with plastic money. Few still rely on executing cash transactions. They are of the belief that credit card purchases trigger unnecessary complications that can affect your financial health.

For those of you who do employ the services of a credit card, you’re liable to make impulsive purchases using it. But at the end of the credit cycle, you’ll be required to make the payment. If you happen to default on your payment, you’ll have to repay the borrowed money along with a high rate of interest. It could also have a negative impact on your credit score, making it difficult for you to avail loans in the future.

On the other hand, when you opt for EMI payments, you know you know that there’s a fixed amount to be paid, and you’ll ascertain your personal finances and budget accordingly. Of course, it isn’t wrong to use a credit card. And if you’re able to manage your finances well, it could even improve your credit score. But when you opt for an EMI card, you will be required to pay a standardised rate of interest, without any hidden charges, and that’s an advantage you don’t want to miss out on.

The First In India: Buy a Mobile Without a Credit Card

For the very first time, buying a smartphone on EMI, without the use of a credit card, has been introduced in India.

The only requirement is that you need to have a functional bank account. Once you’ve got that setup, the monthly EMIs will be deducted directly from your bank balance through an Electronic Clearing System (ECS).

Most people tend to change their smartphones every year. If you’re in on this trend, you can simply exchange your old phone for a new one, and the difference in prices can be settled through your EMI card.

The best part is that you do not have to go in search of a bank or financial institution for this benefit. Right at the time of purchase, at the store itself, you will be offered a range of financing options from various banks. So do some research and choose the one that offers you the best rates.

There’s no doubt about the benefits offered by a smartphone. But the more features there are on your device, the higher the price. So it’s best to assess your needs and figure out what you’re looking for before settling on a particular smartphone.

You’ll also have to take a look at your finances and decide whether this purchase fits in your budget. This decision could have an impact on your financial life, and you need to make sure that you’re getting the best deal out there. Taking into consideration your liquidity, you can either buy a phone on down payment or choose to purchase one through the EMI option.

Eligibility and Documentation

To avail a durable finance loan to enable you to buy a smartphone on EMI, you need to be between 21 years and 60 years of age.The following set of documents is needed to be submitted when opting to buy a smartphone on EMI:

Photo ID Proof: For this, you can furnish your passport, driving licence, Voter’s ID or PAN cardProof of Residence: You’ll be required to provide your property or lease deed, telephone or electricity bills, or a ration card.You may also be required to provide details of your bank and financial statements in some cases.

Paying your EMI

You can conveniently pay for your EMI mobile online. Once you’ve settled on the tenure over which the EMIs are to be spread out, your bank will deduct the EMIs every month directly from your remaining bank balance at the time. Keep in mind, that in the first month, a processing fee would be added to the EMI component of your smartphone loan.

As and when the EMI is due, it would get transferred from your bank account through ECS. It is for this purpose that a cancelled cheque needs to be submitted by you as part of the essential documents.

Is it Advisable to Buy a Smartphone On EMI?

While buying a smartphone on EMI does seem easy on the pocket, you will have to realise that a ‘zero percent interest rate’ doesn’t really exist. You’ll end up paying a processing fee that is charged by the banks, as well as a small interest component which jacks up the base cost of your smartphone.

Smartphone technology is being upgraded at lighting speed, and you’re likely to switch to an upgraded version of your device soon enough. But even if you decide to switch, you’ll need to pay the EMIs on your old phone, so bear this in mind when making a purchase.

Of course, buying a high priced smartphone like an iPhone 6S or a Samsung Galaxy Note 4 is a lot more affordable through the EMI option, but you’ll still need to factor in the total cost at the end of the loan term.

Assess your finances and make a wise decision, so that you aren’t burdened down by unnecessary payments.

Arwind Sharma is a financial advisor with an experience of more than 7 years. He has worked for topmost financial firms in India and has been a visiting faculty at many reputed institutes in India.