With more and more people adopting technology and using it more regularly, and the e-commerce industry growing exponentially many banks and tied up with online vendors to provide customers with new lines of credit. There are many advantages to using Debit Card EMIs to make purchases of consumer durable items, but, just like any other line of credit, need to be handled with care.
Debit Card EMIs are a great way to access a line of credit if you are not inclined to get yourself a Credit Card or take out a loan for the purchase you want to make. Credit Cards are a good tool to have, but only if you know how to use one. If you are not experienced with handling credit, a Credit Card can land you in a lot of debt, that is why a lot of people don’t opt for one. Taking out a loan for making purchases is not that convenient, and you need to know how much you will need. This is where a Debit Card EMI can really help, let's take a look at how this works.
What is a Debit Card EMI?
A Debit Card EMI is a form of overdraft that your bank provides you. When you make a purchase using the Debit Card EMI option, the bank will pay the entire amount of your purchase to the retailer and will provide you an overdraft that you can pay off in EMIs. This facility is available only on some Debit Cards and it is up to the bank’s discretion as to who can avail this facility.
What is the procedure?
Debit Card EMIs provided by select banks on select platforms or with select retailers. There is no set procedure you can follow to avail this facility as it is up to the bank’s discretion whether it wants to provide you this facility or not. The bank will determine your eligibility on the basis of your relationship with the bank, your transaction history, your credit history and other factors relating to your account. If you are eligible for Debit Card EMIs the bank will intimate you or you will see an icon for this service on the vendor’s payment page. You can also approach your bank and check your eligibility.
What are the interest rates?
The interest rates on Debit Card EMIs vary from bank to bank. Some banks provide no-cost EMIs, this means that there is no processing fees or interest attached to the EMIs. The amount you end up paying at the end of your EMI tenure is the purchase price of the product. Interest rates for Debit Card EMIs can range anywhere from 0% to 15%, depending on the bank and the duration of the EMI.
What are the prepayment charges?
The prepayment charges on Debit Card EMIs vary from bank to bank, some banks have no prepayment charges.
What happens when I prepay my Debit Card EMI?
When you prepay or foreclose your Debit Card EMI, the bank will immediately close the overdraft facility opened for the purchase and will intimate you. There are usually no prepayment charges for foreclosing Debit Card EMIs.
