Even today, in India, almost 50% of the mobile phones sold for Rs 30,000 are on EMI. And if we talk about EMI, most iPhones in India are sold on EMI. But after all, people do go on EMI. Look, it’s a simple thing. If you want to buy a mobile phone and if a good phone is not coming in your budget and you want to extend your budget, then you get the simplest option of EMI. Easy monthly installment.
What is EMI?
EMI That is, you keep giving loans every month and understand it like this. But suppose, if you want to buy a phone for Rs 10,000 and you can’t give Rs 10,000 right now and you get EMI of Rs 2,000, then you will have to give Rs 2,000-2,000 in 5 You may end up paying more due to interest months and your mobile phone will be Rs 10,000. Something like this.
The Dangers of EMI
But honestly, no matter how good EMI is, it can be very dangerous. Let me explain this. First of all, the EMI that is given in India is No Cost EMI. That is, you are going to sell a mobile phone and if you Promoted via ads like “No Cost EMI” want to buy it, you will have to give Rs 2,000 to Rs 10,000. And after 5 months, your thing is complete. That is, in 5 months, the installment of Rs 10,000 is complete and it is sold like this.
The Hidden Costs of “No Cost EMI”
However, No Cost EMI seems more interesting because there is no interest rate to be seen here. But many times we have seen that there is a hidden charge, there is a processing fee. And many times, if you delay EMI, it can be a late fee and Missed payments hurt your credit score a penalty. So in the end, the cost can be higher here.
A False Sense of Affordability
Creates a false sense of affordability No Cost EMI is only shown so that people can only be given greed that they cannot afford anything. But they can afford EMI, whether it is Apple’s iPhone or an expensive laptop or another gadget or something else. As far as people cannot afford it, it is very wrong to be able to use EMI there. Because of this, EMI can be very harmful.
EMI as a Marketing Trap
No Cost EMI, which is shown to us, is just like a lollipop. That you people are being given a lollipop of No Cost EMI so that you come in the circle of EMI. And then slowly you will spend more, then we will show our real color here.
Is EMI Always Bad?
However, whether EMI is right or wrong, we can debate about It’s a type of loan it. In some places, it seems right. For example, at the time of Haj, your mobile phone breaks down here. And you need a mobile phone immediately because your study is going on. Maybe your business is going on with it and at that time there is a requirement for you. Because of this, you can buy a mobile phone for 10,000-15,000 rupees on EMI.
Where EMI Makes Sense
I don’t think there is any such problem in it that you can’t do upfront payment now. But now what you do is buy a mobile phone in parts. I understand this thing here.
Luxury on EMI is Risky
This is one thing. And along with this, this is one of the worst financial decisions. That you use EMI here for luxury. If you really need it, there is a necessity. EMI can be a very good solution for you. But when necessity goes here, if luxury comes, then EMI becomes a very big thing.
Real-life Example: Cars
I have seen this in the car market. People’s work can be done with a car of 5-10 lakhs. But they forcefully stretch their budget, take an extra loan, take EMI and buy an expensive car of 20-25 lakhs.
The Risk of Living on Loans
Because let me tell you what happens with EMI. You get instant gratification. That if you wanted to buy an iPhone, you can’t buy it yet. But using EMI, you bought an iPhone. You will enjoy it. But what will happen after that?
Conclusion
So that is a problem. So this is a suggestion. To today’s youth and youngsters. Don’t always think in the short term. EMI has both advantages and disadvantages. Pros And when you are young. If you start earning initially. Avoid EMI in the student phase. And if you really need it. And you don’t have money right now. Then you go behind EMI.