Choose the best Consumer Loan

If you are planning to shop this Christmas or New Year, purchase from your credit card will be expensive following a RBI policy that no banks to allow zero interest on EMI. However, loan from PSU banks may seem feasible especially after recent reduction in interest rates, but still they are seen as an expensive option.

Here is brief information for consumers with regard to the zero percent interest.

Credit Cards

After the recent regulatory change, credit card EMI schemes carry an interest. This interest is about 12 per cent for three/six months and 15 per cent for nine/12 months. However, if you choose this mode of payment, you can be free of hassles as there is no requirement for a down payment or the need to provide proof of address and identity. But, note that you can’t use just any credit card. It should be a provider whom the retailer has a tie-up with, or else you don’t get to avail the EMI scheme.

Bank Loan

Recently many PSU banks including State Bank of India, Punjab National Bank and IDBI have reduced their interest rates on consumer durable loans by around two per cent. The interest rate is currently 12-12.75 per cent per annum. But, for a bank loan, you have to do a bit of running around. First, you would be required to provide your income proof and bank statement and prove your eligibility for the loan. Second, the banker will also require you to put some margin money for the loan and if need be ask you to bring a guarantor.

NBC Finance

Non-banking finance companies such as Bajaj Finserv, Shriram City Union Finance and Tata Capital, still run zero interest EMI schemes in the name of ‘Easy EMI’. Here, you will be required to provide identity proof, address proof, one cancelled cheque leaf and bank statement of last three months along with your photograph for a loan. You would be required to make a down payment of normally, the first four instalments and also pay a processing fee. These schemes are the cheapest of the credit options before a consumer today.
Courtesy: The Hindu