Is your Credit Score >750?
- Get low interest loans & Lifetime FREE credit cards
- Get customized Credit Health Report
- Improve your creditworthiness
How Does Debit Card EMI Work? How To Apply?
Debit card holders can also avail EMI facility for large purchases on ecommerce sites and in-store purchases!
Not everyone holds a credit card, but a debit card is a must have for every savings bank account holder in India. Does it mean that debit card holders have to be deprived of the great offers and discounts that credit card holders get? What about the EMI offers that credit card holders are always talking about? Not anymore! Debit Card holders can also avail the easy EMI facility on their big ticket purchases. Isn't that great? Let us learn more about the Debit Card EMI facility.The ecommerce business has been constantly innovating and offering products to excite shoppers. Debit Card EMI is their latest addition to this list, inviting debit card holders to go on a shopping spree.
EMI option was largely available only to credit card holders. It was primarily seen as a loan product based on the credit cards’ credit limit. But then, lenders realized the potential of customers’ money lying idle in their bank accounts and came up with the Debit Card EMI facility.
What Is The Debit Card EMI Facility?
In a Debit Card EMI, the user uses their debit card to make a purchase and converts it into easy EMIs, just like a credit card EMI option. Account holders are offered this Debit Card EMI facility in the form of a pre-approved overdraft facility. The Bank thus conveys the payment to the seller on your behalf, so instead of a one-time billing, you pay back via EMI through the current or savings account linked to your debit card. You can use this payment option to make a purchase even if you do not have the full amount in your bank account.
Let us see this with an example –
Assume you want to make a purchase of Rs. 50,000 online and choose the Debit Card EMI option with a 6-month repayment period. Following approval by the bank and the merchant, Rs. 50,000 will be credited to your bank account, from which a direct payment to the seller will be made. This Rs. 50,000, plus applicable interest, is repaid in 6 monthly instalments to the bank from your bank account directly.
Debit Card EMIs are now offered by leading banks – like
Important Things You Should Know About Debit Card EMIs
1. The eligible amount and tenures range greatly among different lenders. While ICICI offers Debit Card EMI on transactions starting from Rs.5000, SBI offers for transactions above Rs.8000. Similar to the minimum transaction amount, the maximum transaction amount can also vary from Rs.1 lakh up to Rs. 5 lakhs.
2. The tenures generally range between 3 to 24 months. But the final available tenure options are determined by the transaction amount.
3. There is a nominal processing fee charged to avail this Debit Card EMI facility.
4. There is no need for any additional documentation
5. This facility is available only on select ecommerce platforms on select brands and products.
6. Interest rates can range from 12 to 16% per annum
7. This facility should be opted at the time of purchase itself. There is no option to convert a transaction into EMI post-purchase.
8. Also, the offer is available only on particular debit cards of a bank. So users have to confirm whether their particular debit card variant is eligible for the offer before making the purchase.
Additional Read: How Debit Credit & Cards Can Teach Children The Basics Of Money MattersHow To Avail The Debit Card EMI Facility?
Availing this facility is pretty much similar to the facility using a credit card. Let us see the steps –
1. The buyer must first determine which products are eligible for Debit Card EMI. This is available on the product information page.
2. Once you've confirmed your choice, go to the checkout page. Choose your debit card and then the EMI option from the payment options.
3. You will be shown the various tenure options and interest rates. Choose the best option for you and complete the payment.
4. You will be required to provide additional authentication in the form of a PIN or an OTP. The order is placed once you enter the information.
5. The entire transaction amount is blocked on your Debit Card until the EMI conversion is completed. The EMI conversion and account reversal occurs within two business working days of the transaction date. The first installment will be deducted 30 days after the money is reversed in the account.
Advantages Of Debit Card EMI Over Credit Card EMI
1. Not everyone has a credit card. Your credit score may not be conducive to get you a good credit card. So opting for Debit Card EMI is a great option for you to make large purchases and repay them in comfortable installments.
2. Debit Card EMI is considered a loan and it is reported to the credit bureau. So it is a great opportunity for you to build your credit score.
3. Since the EMI is directly linked to your savings bank/current bank account, the EMI amount is auto-debited every month. So the chances of missed payments or defaults is naturally less.
FAQs Of Debit Card EMI:
1. Can I Debit Card EMI option for both online and offline shopping?
Yes, though online transactions are most popular, Debit Card EMI is available for in-store purchases too. But the number of merchants and products available for this category may not be extensive.
2. Am I charged interest on Debit Card EMIs?
Yes, Debit Card EMI is also a form of loan and charges interest. Current interest rates range from 12-16% per annum.
3. What is the typical tenure range I can get on Debit Card EMIs?
Typically, banks allow a tenure range of 3-12 months. Some banks offer up to 24 months.
4. I recently purchased a refrigerator on Amazon using my SBI debit card. Can I convert the transaction into an EMI?
Debit Card EMI should be opted at the time of purchase. Post-purchase EMI conversion is not available with debit cards.
5. Is the debit card EMI option available on all debit cards?
No, the facility is available only on select debit cards, merchants, & brands.
