EMIs On Debit Cards: Buy Now, Pay Later

There are times in life where you’ll need a helping hand, sometimes that helping hand might be an easy line of credit to buy something you need urgently. There are a couple of ways to pay for your online purchases using Equated Monthly Instalments (EMIs), you can opt for a personal loan or use your credit card, but both of these require additional documentation, especially in the case of a personal loan, personal loans also take 3 – 4 working days for approval and disbursal. The approval time for a credit card from the time of application is somewhere between 3 – 4 weeks, making neither of these a good option for a quick and easy line of credit.

Online retailers have noticed that a large portion of people are discouraged from making big purchases due to the fact that they do not have easy access to credit when they want to make the purchase. For this reason, many banks and online retailers have partnered to allow their customers to make payments through EMIs on their Debit Cards. What are Debit Card EMIs? Let’s find out.

What Is A Debit Card EMI?

There are two methods the bank uses to convert the purchases charged to your debit card into EMIs.

When The Bill Amount Is Converted To A Loan

In some cases when you opt to pay using the Debit Card EMI facility the bank will charge the entire bill amount to your card and then credit it back into your bank account after a couple of days. Once the amount is credited back into your bank account the outstanding bill amount will be converted into a loan. This loan can be repaid in EMIs. The reason the bank initially debits the entire bill amount from your account is to make sure you have sufficient funds to repay the entire loan amount.

When The Bill Amount Is Converted Into An Overdraft

Debit Card EMIs can also be provided as a type of overdraft against the customer’s bank account. When you make a purchase using the Debit Card EMI facility in some cases the bank will overdraft your account for the outstanding bill amount and will allow you to repay the overdraft in EMIs. The advantage of this is that the entire bill amount will not be debited from your account, giving you uninterrupted access to your funds.

Who Is Eligible?

The Debit Card EMI facility is available on select cards. HDFC Bank, ICICI Bank, SBI, Kotak Mahindra Bank and Axis Bank have partnered with Amazon and Flipkart to allow select customers to access the Debit Card EMI facility. The eligibility of a Debit Card to access this facility is left to the discretion of the bank. The bank factors in things like your credit score, transaction history, the duration for which you have held the account, your overall relationship with the bank, and many other things to determine your card’s eligibility. This means that there is no documentation required to access this facility.

How To Check Eligibility?

There are a couple of ways to check if your Debit Card is eligible for the Debit Card EMI facility. If your card is eligible for this facility the Debit Card EMI option will appear in the payment options. You can also check your Debit Card’s eligibility by reaching out to your bank. Check your eligibility now.

  • HDFC Bank: SMS ‘DCEMI<space><Last four digits of your Debit Card> to 56767

  • Kotak Mahindra: SMS CDL<space>PAN(In caps) to 5676788

  • Axis Bank: SMS ‘DCEMI<space><Last four digits of your Debit Card> to 5676782

  • SBI: Contact Bank’s Customer Care

  • ICICI Bank: Contact Bank’s Customer Care

What Are The Benefits Of Debit Card EMIs?

The Debit Card EMI has many benefits if you’re looking for an easy line of credit for online shopping.

Availability of Funds

The Debit Card EMI facility does not require any downpayment and usually will not convert the outstanding amount into a loan.

No Processing Fees

When your purchase amount is converted into EMIs, the bank will not charge any extra processing fee for this. The Debit Card EMI will be only according to your bill amount.

Flexible Tenures

The Debit Card EMI option will allow you to repay the amount anywhere between 3 months to 24 months. Tenures do slight vary depending on the bank.

Instant Disbursal

Since Debit Card EMIs are only provided on select cards and the bank scrutinizes cards before providing this service, when you apply for a Debit Card EMI the amount is disbursed to the merchant almost immediately.

No Documentation

Debit Card EMIs are only provided to existing Debit Card holders of select banks. So when you apply for a Debit Card EMI there is no additional documentation required, the details and documents provided at the time of opening the account should suffice.

No Downpayment

Debit Card EMIs do not require a downpayment. You can get 100% financing when shopping for your favorite products.

The next time you pull out your credit card to make a large purchase or decide to take a loan for that next big thing, stop and have a look at your Debit Card. Debit Card EMIs can be the perfect tool for when you need to buy something urgently, but if not managed properly they can create havoc in your personal finances. So make sure you read all the terms and conditions carefully before taking a Debit Card EMI.

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