Skip to main content

EMI on credit

Download Tax Saving Mutual Fund Application Forms

Invest In Tax Saving Mutual Funds Online

Buy Gold Mutual Funds

Leave a missed Call on

94 8300 8300

Every time you swipe your credit card for a big amount, you get a message from your bank asking if you want to pay through Equated Monthly Instalment ( EMI). But how hassle free and attractive is this option? While the use of credit cards as a mode of payments has caught on well, most people don't realise the perils of reckless use of credit cards. If you spend beyond your repaying capacity and do not pay your bill on time, most credit cards charge prohibitively high interest rates in the range of 36 per cent and 45 per cent.

So, how does one deal with this? One way is to opt for the EMI route that comes at lower rate of interest. Let us find out how to go about it.

It is important to know whether your card has an EMI facility. Most of the large banks that are active in the credit card segment offer this facility. Banks permit an outstanding of up to ₹ 5 lakh for EMI facility and the rate of interest charged is in the range of 16 to 22 per cent. So, check with your card- issuing bank whether it offers the facility or not.

If your credit card does not offer the option to repay through EMI, then you can either opt for a personal loan or transfer your balance to some other credit card to ensure timely repayment of the outstanding amount, failing which you have to bear high interest rate on the credit card. This may pull down your credit score if you fail to repay time.

On the other hand, if your bank does offer the facility to repay your through EMI, there are some factors you need to be aware of.

Credit limit is reduced

The moment you opt for an EMI repayment arrangement, the credit limit is reduced to the extent of the principal outstanding. As you keep repaying through EMI, the credit limit is freed.

To put it simply, opting for EMI can block your spending capacity in the subsequent months. This can be a big issue if you are dependent on your credit card either to fund your future expense or for some routine payments.

A bank may offer EMI facility for as up to two years. This means for two years the credit card holder has to bear with lowered credit limit. Banks do not increase credit limit of a credit card when outstanding amount on that card is being paid through EMI. You have to be careful that you don't exceed the credit limit while using your card throughout the tenure of the EMI facility.

Processing fee

Another factor you need to bear in mind is the one- time processing fee that banks charge to initiate EMI option. This fee is charged upfront and adds to the costs to be paid by you. The fee is generally expressed as a percentage of the loan availed on EMI option. Usually, it does not exceed ₹ 5,000.

You can negotiate this amount, and if you are a loyal customer of the bank for a long time, the bank may even choose to waive it. In some cases, the bank may partly waive the processing fee and ask the credit card holder to pay the remaining up- front.

Insurance option

Some banks also offer insurance option to a cardholder. For an extra charge towards premium, insurance companies offer to pay the outstanding principal in case of an eventuality. The premium is added to the outstanding amount and the credit card holder is intimated accordingly. The EMI amount takes care of both – the outstanding bank. It is a win- win situation for all three parties involved– the cardholder, the bank and the insurance company. Besides this, opting for an EMI option can help an individual save his/ her credit score from falling.

Given these advantages of paying a credit card bill through an EMI option, a question that merits attention is: Is this the right and profitable way of repaying your credit card bill? The answer is no. You should spend when needed. You must remain within the limits defined by your monthly income.

EMI facility is not to be seen as an enabler and a source of leverage when one is on the shopping spree.

You must think of EMI option if and only if you are on the verge of defaulting a payment. While it is useful to tide over a temporary cash crunch and can save your credit score from going down, it can be a burden on your finances for a prolonged period of time. Also, too many EMI arrangements also impact credit score adversely.

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

Leave a missed Call on 94 8300 8300

Leave your comment with mail ID and we will answer them

OR

You can write back to us at

PrajnaCapital [at] Gmail [dot] Com

---------------------------------------------

Invest Mutual Funds Online

Invest Any Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

Download Mutual Any Fund Application Forms

---------------------------------------------

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Franklin India Bluechip
      4. ICICI Prudential Top 100 Fund

B. Large and Midcap Funds Invest Online

      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
      4. Birla Sun Life Front Line Equity Fund
      5. Franklin India Prima

C. Mid and SmallCap Funds Invest Online

      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
      5. Birla Sun Life Dividend Yield Plus
      6. SBI Emerging Businesses Fund
      7. HDFC Mid-Cap Opportunities Fund
      8. ICICI Prudential Discovery Fund

D. Small and MicroCap Funds Invest Online

      1. DSP BlackRock MicroCap Fund
      2. Franklin India Smaller Companies

E. Sector Funds Invest Online

      1. Reliance Banking Fund
      2. Reliance Banking Fund
      3. ICICI Prudential Banking and Financial Services Fund

F. Tax Saver Mutual Funds Invest Online

1. ICICI Prudential Tax Plan

2. HDFC Taxsaver

      1. DSP BlackRock Tax Saver Fund
      2. Reliance Tax Saver (ELSS) Fund

G. Gold Mutual Funds Invest Online

      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund
      4. Birla Sun Life Gold

H. International funds Invest Online

1. Birla Sun Life International Equity Plan A

2. DSP BlackRock US Flexible Equity

3. FT India Feeder Franklin US Opportunities

4. ICICI Prudential US Bluechip Equity

5. Motilal Oswal MOSt Shares NASDAQ-100 ETF

Popular posts from this blog

JP Morgan launches Emerging Markets Opportunities Equity Offshore Fund

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300 JP Morgan launches Emerging Markets Opportunities Equity Offshore Fund    The new fund offer opens for subscription on 16 th June and closes on 30 th June. JP Morgan Mutual Fund today announced the launch of its open end fund of fund called Emerging Markets Opportunities Equity Offshore Fund. The fund will invest in an aggressively managed portfolio of emerging market companies in the underlying fund - JPMorgan Funds - Emerging Markets Opportunities Fund, says a JP Morgan press release. Noriko Kuroki, Client Portfolio Manager, Global Emerging Markets Team (Singapore), JPMAM said, "Emerging markets have been out of favour for several years, as growth decelerated and earnings struggled. However, in a world of globalisation, we believe that EM will eventually re-couple with DM, leading to the long-aw...
Read more

Nifty F&O

  1. What is a straddle? A strategy using Nifty options usually before a major event or when one is uncertain of market direction. Comprises purchase of a Nifty call and put option of the same strike price. Usually strikes are purchased closer to the level of the underlying index. 2. What is better ­ buying or selling a straddle? It depends.Implied volatili ty of options, or near-term expectations of price swings in an un derlier like Nifty , usually peaks before an event and falls when the outcome plays out ­ like Infy re sults in past years. However, once the event plays out, a sharp rise or fall in Nifty could result in price of the straddle rising ­ benefiting buy ers. But, normally , those who sell or write options charge hefty premiums from buyers in the hope that fall in volatility would ensure the options end out-of-the-money, hurting buyers. 3. So, do straddle sellers end up winning most of the time? Yes. That's invariably the case when market volatility is trending on the...
Read more

L&T Long Term Infrastructure Bond 2012 Tranche 2 Application Forms

Application form for Tax Saving Long Term Infrastructure Bond     L&T Long Term Infra Bond Application form     Submit filled up application     Collection canter near you     --------------------------------------------- Invest Tax Saving Mutual Funds Online Mutual Funds Online   Download Tax Saving Mutual Fund Application Forms from all AMCs Download Tax Saving Mutual Fund Applications   ---------------------------------------------   How to apply to PFC Bonds? Apply for PFC Tax Free Bonds forms below Download PFC TAX Free Bond Application Forms Submit the filled up form to Collection canter near you How to apply to NHAI Bonds? You can download the NHAI Tax Free Bonds forms below Download NHAI Tax Free bond Application Forms Submit the filled up form to Collection canter near you        
Read more

UTI Equity Fund Invest Online

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India)   UTI Equity Fund   Invest Online UTI Equity is a large cap-oriented fund with assets under management worth Rs. 2,269 crore (as on June 30, 2013). The fund was originally launched in May 1992 as UTI Mastergain and is benchmarked against S&P BSE 100. A couple of years back the name of the fund was changed to UTI Equity Fund and many of the smaller funds of UTI were merged into this fund. Performance The fund has outperformed its benchmark as well as the equity diversified category average in the last one-, three- and five-year periods. It has repeated the same in 2013 (as on May 31). Since its inception the fund has delivered an impressive 26 per cent compounded annual growth rate which is superior to its benchmark performance in the same period. Y...
Read more

Changing the scheme preference in NPS

The NPS allows subscribers to choose the pension fund schemes in which they would like their contributions to be invested, as well as the pension fund manager who will manage their money. Subscribers can indicate their preference by mentioning the ratio in which their contribution will be invested in equity, corporate bonds and government bonds. They can also change this preference if they wish to do so. Here's how to go about it. Active vs auto As an alternative to choosing fund schemes, the NPS offers an auto choice where the proportions are pre-decided based on the age of the subscriber. The ratios cannot be modified in the auto choice, without changing the mode to active. Corporate If the subscriber is investing in the NPS through his corporate employer, the employer should offer all the options that the subscribers can choose from to change their preference. Physical form A form, UOS-S3CS-S3, has to be filled in and submitted to the PoP-SP through which the NPS account was ope...
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now