Buying a ₹1L Phone on EMI? Check This First
Before you buy that new phone, bike, or car on EMI, there's a simple rule to check if you can truly afford it — without wrecking your savings or going into a debt trap.
That ₹80,000 phone EMI could fund 4 months of your SIP instead.
Spending more than this on EMIs puts your finances at serious risk
Key Takeaways
Calculate your EMI-to-income ratio: add all monthly EMIs and divide by your take-home salary — if it exceeds 40%, delay the purchase.
Use the 1/10th rule as a quick gut check: the item's price should not exceed one month of your gross annual income divided by 10.
Before applying for a consumer loan or EMI scheme, check your CIBIL score on GoCredit — a hard inquiry from a rejected loan hurts your score.
Before you buy that new phone, bike, or car on EMI, there's a simple rule to check if you can truly afford it — without wrecking your savings or going into a debt trap.
Here's what happened: Rising consumer credit means more Indians are buying gadgets, bikes, and cars on EMI without checking affordability first.. Financial planners flag that EMI-to-income ratio above 40% is a red zone — most buyers never calculate this before purchasing.. Buy Now Pay Later schemes and zero-cost EMI offers mask the true cost, making unaffordable purchases feel guilt-free in the moment..
What you should do: Calculate your EMI-to-income ratio: add all monthly EMIs and divide by your take-home salary — if it exceeds 40%, delay the purchase.. Use the 1/10th rule as a quick gut check: the item's price should not exceed one month of your gross annual income divided by 10.. Before applying for a consumer loan or EMI scheme, check your CIBIL score on GoCredit — a hard inquiry from a rejected loan hurts your score..
Zero-cost EMI is never truly free — the discount you lose equals the hidden interest. Always ask the seller for the cash price vs. EMI price difference.
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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.