Big Purchase? 3 Rules to Know Your Affordability
Thinking of buying a phone, bike, or car on EMI? Before you say yes, check if your income can actually handle it. Here are 3 simple rules to decide if a big purchase is truly affordable — or just tempting.
Most Indians spend more on a phone EMI than on their monthly SIP — and never notice.
Your EMIs should never cross this limit of your take-home pay
Key Takeaways
Add up ALL your current EMIs and divide by your take-home pay — if the result exceeds 0.40, delay the new purchase.
Use the 3-month savings test: if you cannot save the full purchase amount within 3 months, opt for a smaller model or wait.
Before applying for a consumer loan or credit card EMI, check your CIBIL score — a hard inquiry for a rejected loan drops your score by up to 10 points.
Thinking of buying a phone, bike, or car on EMI? Before you say yes, check if your income can actually handle it. Here are 3 simple rules to decide if a big purchase is truly affordable — or just tempting.
Here's what happened: Rising EMI culture means Indians are financing everything from ₹15,000 phones to ₹8 lakh bikes without checking total debt load.. Financial planners recommend your total EMIs — including home, car, and personal loans — should not exceed 40% of your take-home salary.. Many buyers skip the opportunity cost check: money locked in an EMI could be compounding in a SIP or FD instead..
What you should do: Add up ALL your current EMIs and divide by your take-home pay — if the result exceeds 0.40, delay the new purchase.. Use the 3-month savings test: if you cannot save the full purchase amount within 3 months, opt for a smaller model or wait.. Before applying for a consumer loan or credit card EMI, check your CIBIL score — a hard inquiry for a rejected loan drops your score by up to 10 points..
Pro tip: For gadgets and phones, wait for the 3-month-old price drop. iPhones and Android flagships typically fall ₹5,000–₹10,000 within 90 days of launch — buy then, not on Day 1 FOMO.
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This article is reported by GoCredit's Editorial Team based on the source above. GoCredit synthesises, contextualises, and adds India-borrower-relevant analysis. We are not the original publisher.