What Is An EMI?
EMI stands for Equally Monthly Installment Plan which is a type of credit card payment plan that offers consumers the convenience of not having to make one large monthly payment. The EMI plan can be used to finance any number of products or services, but it is most often applied towards car rentals and home improvement projects.
The payment plan offers a way for customers to pay off their purchases over time without the need to carry large debt.
The installment plan was introduced in the US in the 1920s, just 10 years after electricity was introduced. The idea behind it was that if people could receive electricity over a period of time, they would be able to make payments on the electric bill instead of making one large payment at one point.
How to Choose the Best EMI Plan for You?
EMI plans were introduced for credit card users so that they can pay their bills on time. The two most common types of EMI plans are the deferred-interest plan and the no-interest plan.
The deferred-interest plan is an interest-free credit plan where you can pay your EMIs in one shot or installments over a period of time. The no-interest plan has no interest charges attached to it. This is particularly important if you want to save on EMIs and avoid paying high-interest rates on your credit card bills.
Mistakes you Should avoid when Choosing Your EMI Plan
If you want to avoid the mistakes that other people have made, then you should do your research first. The mistakes that people make when choosing an EMI plan for their business are as follows:
- Not considering the monthly payment
- Not considering what type of payment they will need
- Choosing a plan with a high-interest rate
- Not understanding how their spending habits can change with their business