We live in a world where every consumable item present on earth can be avail through emi. EMI stands for equated monthly installment that a purchaser or a borrower has to pay in equal interval of time (usually each month) in return for purchasing or using and 
asset or commodities. With increased penetration of banks and financial institutions, you can avail anything like home, car, and electronic appliances in form of emi. Usually, consumers search for online emi calculator before going ahead with any purchase on emi. Let us look at various advantages and disadvantages on purchase with emi-
Advantages-
- Power to buy – EMI gives you power to buy items which a consumer wouldn’t be able to buy at one go. For example, a salaried individual would find it very difficult to buy a home in a metro city without the help of an affordable emi from banks.
- Affordable high priced commodities – EMI has given power to consumer by making costly things affordable for them.
- Ease of payment – EMI gives ease of payment to most individuals as it results in very minimal outgo from a customer’s pocket on monthly basis. One can easily calculate his monthly outgo with the help of any online emi calculator.
Disadvantages –
- Higher amount paid – By paying for an item under emi, consumers have to pay extra to the banks. This extra cost is interest that a financial institution charges for using their funds over a period of time.
- Long term debts – EMI results in long term debt for a consumer. Contrary to payment in lump sum, emi will go over a period of time and will add extra burden on consumer’s pocket.
- Serious consequences – Skipping your emi or defaulting on payments can result in serious consequences for a consumer. In case of any mortgaged backed loan like home loan or car loan, bank has a full right to legally takeover the mortgaged asset in case of the long term default. It is better to use any online emi calculator to truly assess your
repayment capacity before going ahead with any loan.
As we can see from above article, emi has both advantages as well as disadvantages for a customer. EMI is light on pocket for a customer and results in a smooth payment but it will always results in higher payment. It is always advisable to read fine print of agreement and use online emi calculator to assess your repayment capacity.
