What is the Difference Between EMI on Credit Card and Easy Finance?

There are many things people can’t afford easily. Examples include home appliances, furniture, automobiles, and what not. Thus, to make these expensive items affordable, the concept of EMI was developed.

These days, Equated Monthly Instalment (EMI) plans come in different formats. The most common two are as follows:

EMI on Credit Card

EMI on credit card is the most common EMI scheme that people opt for. In this, you choose the number of instalments for your purchase viz. 3,6.9, 12 or more. Note that the instalments are paid on a monthly basis. So, 3 instalments will be paid in three months, 6 in six months, and so on.

The actual price of the product is added to the interest charged by your credit card provider, and the final amount is divided on the basis of the no. of instalments chosen by you. So, if the product costs Rs. 10,000, and the interest charged is 12% then the final amount becomes:

Rs. 10,000 + 12% of Rs. 10,000 = 10,000 + 1200= Rs. 11,200

Say you chose to pay in three instalments then your EMI becomes 11,200/3= Rs. 3733

Usually, the lender also adds a processing fee and other charges to the final amount, so the actual EMI is likely to be higher.

Easy Finance

Easy Finance or Easy Financing are the terms often used by traditional lenders and NBFCs these days. But what does it mean?

Easy Financing usually refers to an EMI scheme in which you get to enjoy really low-interest rates. In some cases, you could also get a 0% interest rate. However, the catch here is that you have to make a sizeable down payment, which can easily be about 25% to 30% of the total price of the product you want to buy.

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