EMI (Equated Monthly Installment) Often many of us take loans for any of our work, bussiness, building a house, buying a product. And most of the loans are taken by banks only. However, there are many finance companies too, from which we can take loans. What is EMI?
And if you are doing online shopping then definitely you have used big ecommerce companies like amazon, flipkart. On these also we get the option of EMI, maybe you have noticed.
You will be happy to know that online shopping has become easier due to EMI.
What is EMI
The full form of EMI is Equated monthly installment . That is, if you buy something on EMI. So you have to make equal payment every month. Because the EMI of your purchased item is divided equally in months according to the payment tenure chosen by you.
And the method of repaying that loan is called EMI. By the way, wherever you take anything on loan, it is obvious that interest will be charged. That is, apart from the principal amount, we also have to pay interest.
But maybe you have also heard no cost EMI. However, this option is available only on online shopping sites. And its biggest advantage is that we do not have to pay any interest rate.
But if you want to take any other loan other than shopping or want to buy something. So you have to pay interest. And the interest rates of all companies are different.
So let us tell you in these two ways what is EMI. First buying vehicle on EMI and second home loan.
You may or may not have any specific knowledge about EMI, but surely you will know that vehicles are bought on EMI. Like cars, bikes, here is an example of that.
As you can see in above image. The monthly installment of a car hyundai elatra for 3 year loan period is 65,552 INR.
You can see the final price of the car shown above is around 20,00,000. The payable amount including loan and interest is 23,60,232 INR. And that too after downpayment, although you can choose the loan term as per your convenience. Instead of 3, you can also do 5 years but the interest will increase.
Now we have to pay this amount of 23,60,232 in 3 years, which you will have to pay every month, so 3 years means 36 months. Accordingly, your EMI for this amount will be 65,562 INR, which is called monthly payment EMI.
Suppose if you take such a thing on EMI, the cost of which will be around 2,00,000 INR including interest. And its loan period you choose 3 years. So your monthly EMI will be around 5555 INR. That means for 3 years approximately 5555 INR will have to be paid every month.
And it is obvious that you may not be able to pay a large amount at once. But with the help of EMI, you can make your work easier.
Let us assume that you take a home loan. Which is 5,00,000 INR, whose tenure we choose three years. So the total amount as per 6.90% interest rate is INR 5,54,964 (Finance Copanies, Banks interest rates may vary)
So the monthly EMI of this amount for 3 years will be INR 15,416. That is, once you can get your house built by taking a loan from a bank or finance company. And you can pay that huge amount in installments.
By the way, if something has to be taken in the offline process, then it may take some time for EMI. But it does not mean that EMI is not used. EMI is used by many people. The profits of banks, and finance companies depend on their interest rate, loan amount, and loan period (Tenure).
But you will be happy to know that the option of “No cost EMI” is also available in the online world. Which is a very good option and it is also used a lot. “No cost EMI” means you have to pay only the principal amount in EMI.
You will not have to pay any interest on it. If you use sites like amazon, flipkart. So “No cost EMI” can prove to be a best option for you.
So we have given you complete information about EMI.
But if you still have any doubt in your mind then you can ask in the comment section. There will definitely be doubt because EMI is such a thing. And if you want to know about No Cost EMI then you can read our next article.
Because no cost EMI is very useful for you, because if you want to buy something which costs 10,000 20,000 30,000 50,000+ INR. Which you cannot repay in one go, then there is nothing to worry about.
You can buy it and that too with 0 downpayment. That means you will not have to pay for buying it and you will get that product for free. And from next month, you can pay its EMI little by little.
what is no cost emi
If you make a purchase on No Cost EMI, then you will not have to pay interest on it. You have to pay only the basic amount for the product you bought.
The best thing about no cost EMI is that you can also buy the product on EMI. And which you can pay in installments. And then choose any tenure for this, the tenure will not affect the No Cost EMI.
By the way, we have to pay interest on purchases made on normal bank EMI or financial companies EMI. But if you do online shopping. So No Cost EMI can prove to be very beneficial for you.
Because we get the option of no cost EMI on big ecommerce sites like amazon flipkart. Using which we can do shopping and at any extra cost.
We keep getting many offers on Ecommerce companies, we keep getting different offers on different products. And No cost EMI is also an offer in a way. Because No Cost EMI is not available on all products.
Interest is the main income source of loan giving banks or finance companies. And depends on their interest, interest rate, tenure, loan amount.
But many products are available on No Cost EMI on amazon, flipkart etc. But you are getting the product on No Cost EMI. So it does not mean that the bank will not benefit from it, it will benefit the bank. Because they depend on the deals of sellers and banks.
This is the reason that no cost EMI is also not available on all products.
If you have a budget that you can buy the product by paying the full amount. So it is a good thing because if full payment is done after taking the product, then it remains for the talk, then it does not give any problem. But if you do not have that much amount. That you can pay that amount in one go. So no problem you can use No Cost EMI. Because if it is a matter of small products, then it is different, anyone can easily buy them on full payment. But if it is a matter of big products, then it can be heavy on our pocket. Because they cost a bit more. But you cannot get such a huge amount in one go. So you should select the option of EMI.
But the customer benefits more in this. When that product is available on No Cost EMI because in this case we will not have to pay even a single rupee more than the fixed rate of that product. That is, there will be no interest of any kind.
What is EMI payment
On purchasing on EMI, installment has to be paid every month, which is called EMI payment.
From this article you learned what is EMI and EMI full form. We hope this information will prove useful for you.