The EMI trap
Buying something on instalments may appeal to your lifestyle needs, but it may lead you to a debt trap that could potentially ruin you.

- Mar 7, 2016,
- Updated Oct 21, 2016 4:25 PM IST
When Indore-based Aarav Srivastav bought a mobile phone for Rs 40,000 on a six-month EMI, the 26-year-old thought he would have to make a down payment of Rs 5,500 and the equated monthly instalcost ment would work out to Rs 5,750. But, to his surprise he had to pay Rs 6,250 per month, or an extra Rs 3,000, for the device - the added cost comprised processing and interest fees.
However, remember that debt is not always a bad thing, but if you form a habit of taking loans for everything, you are weakening your financial position. So, tread carefully in the world of attractive loan offers.
When Indore-based Aarav Srivastav bought a mobile phone for Rs 40,000 on a six-month EMI, the 26-year-old thought he would have to make a down payment of Rs 5,500 and the equated monthly instalcost ment would work out to Rs 5,750. But, to his surprise he had to pay Rs 6,250 per month, or an extra Rs 3,000, for the device - the added cost comprised processing and interest fees.
However, remember that debt is not always a bad thing, but if you form a habit of taking loans for everything, you are weakening your financial position. So, tread carefully in the world of attractive loan offers.