Today almost things from cell phones to houses can be bought in monthly installments. Contrary to popular belief, EMI (Equated Monthly Installment) is not just another ploy by commercial giants to entice you into buying more stuff. If you take moment to analyze, you will realize the from the buyers stand point also, EMI has several benefits over down payment. Here is a short list of reasons why you should prefer EMI to down payment next time you go shopping:
- First and foremost, EMI allows you to repay your debt in your own time with each installment worth just a fraction of the actual price. This is a great way to safe guard yourself against an emergency financial crunch.
- EMI is an ideal way to procure a product which you require expressly but just then do not have enough money to pay for it (such as a car).
- With EMI, things will apparently become cheaper specially if repayment period is very long (as in the case of house loans). Though this may sound ridiculous at first, spare a moment and you will realize why: money is constantly suffering devaluation and sum of money which appears significant today will surely loose some of its significance in a few years time.
- Today many products are available at 0% finance meaning the net value paid through EMIs is same as the original price of the product. If this is the case, then every month you will earn a small interest by keeping the rest of the money in your bank. And every little bit helps, right?
However, it is easy to get carried away when buying thing using EMIs (same as during a major sale) so always try and keep control over your shopaholic self and keep reminding yourself that you will have to pay up in the months to come. While shopping with EMIs it is strongly advisable that you plan ahead and try to estimate your major upcoming and unavoidable spendings. Stay safe. Have fun!