The EMI Culture

Over the years a lot of things have changed, culture, the standard of living, and lifestyle and so on. Over the years due to globalization people have adopted different forms of lifestyle. Increase in jobs, investment opportunities and increase in the per capita income of households and individuals have opened new avenues for the masses to fulfill their requirements. A new trend which has drastically developed is the trend of EMI. Now lets first understand what exactly do we mean by the term EMI. EMI is the short form for Equated Monthly Instalment. Over the times the basic and other requirements of the masses have increased, but the resources have always remained scarce, due to which many people were deprived of fulfilling their needs. To reduce this gap, financial institutes and banks adopted the EMI policy; which is a type of lending policy.

The EMI policy has not only paved a way for the consumers to consume their desired goods and services, but it has almost become a common story in almost every household. Youngsters and the middle class are the vital players in this policies, a trend has developed amongst them to live their lives in the EMI culture. EMI is a form of a loan which financial institutes and banks offer to their clients to buy their desired goods and services. They consumers don’t have to pay for their goods/services in a single down payment, they can pay a small amount as down payment and the rest of the amount can be paid in the form   EMI over some months. In this way, the consumer is not financially burdened to buy a product. Although the EMI culture appears to be a boon to people sometimes it can act as a termite for certain people if it is not practiced in the right way. Many times when people taste the comfort of EMI, they tend to use this trend to buy almost all products, as they feel that they can pay for the products/services in easy installments. But in reality, they get burdened with EMI installments of the numerous products at the same tie.

Products/services for which EMI is available

• Consumer goods
• Electronic Goods
• Home appliances
• Online Clothing and apparels
• Furniture and furnishing products
• Jewelry
• Automobiles

Benefits of EMI

• One can buy their desired products and services by paying a small amount as down payment.
• One can pay for the product in small easy installments over a period of months.
• EMI is available on numerous products and services.
• EMI decreases the financial burden on consumers.
• It also facilitates consumerism and marketing of various goods globally in an easy process.
• Companies have also developed many schemes for their consumers to allow them to buy the product of their desire, it has become a trending marketing strategy adopted by companies

Demerits of the EMI culture

• People end up buying numerous products simultaneously.
• When one pays for a product through EMIs then he ends up paying more than the actual price of the product, in the form of interest rates.
• To buy a product through the EMI policy one has paid a processing fee to avail the EMI policy.
• If the product brought on EMI policy is not purchased in a planned way, one can land up in the financial and legal problem. If one fails to pay a particular installment on time then he may be burdened with a higher rate of interest or may have to face legal formalities.
• Always remember that when you pay for a product through EMI your chances of saving decreases, as the money for savings is diverted towards EMI payment.

Conclusion:

The EMI trend is drastically expanded globally, and almost every family is part of this culture. The EMI culture has both benefits and demerits, therefore it is very important to use it in a wise way. One should not get swayed away by the short-term benefit of the policy, in the future one ends up paying more for product brought under the EMI policy. One should only buy those products under this scheme only when they think that the product or service is extremely vital.