5 EMI Traps This Diwali: Is Your Budget Safe?

Festive season deals make it easy to stack multiple EMIs without realising the total hit to your monthly budget. Here is how to enjoy Diwali without falling into a debt trap that follows you into the new year.

Here's what happened: Festive season credit offers — EMI schemes, BNPL, credit card conversions — are at their peak in October-November, making impulse borrowing extremely easy for Indian households.. RBI data shows personal loan growth has consistently outpaced income growth among middle-class borrowers, with short-tenor consumer loans being the fastest-growing segment.. Financial planners flag that stacking multiple small EMIs during Diwali is the single most common reason household budgets break down in Q1 of the following year..

What you should do: Calculate your total EMI-to-income ratio right now — add every existing EMI plus any new one you are considering; if the total crosses 40–50% of take-home pay, pause the purchase.. Read the full terms of any 'No Cost EMI' or BNPL offer before confirming — check for processing fees, GST charges, and whether it cancels your credit card's interest-free period.. Separate your Diwali shopping list into two columns — 'planned and budgeted' versus 'impulse' — and commit to financing only items in the first column via EMI..

Pre-paying even one or two EMIs on an existing personal loan before taking a new festive loan reduces your FOIR (Fixed Obligation to Income Ratio) and can get you a lower interest rate on the new loan.