It is festive mood across India and we are all very much eager to buy home appliances or mobile gadgets on these auspicious days. So few consumer durable companies or intermediaries offer you banned 0% interest in different format. Once such offer is Univercell UMI.
Recently, while crossing the road I came across Univercell Showrom, which highlighting the offer called 0% UMI. With eager (not to buy, but to know more about ZERO PERCENT OFFER), I visited the showroom and found some interesting and banned loan offerings.
What is this Univercell UMI?
When I visited the showroom and asked for this offer, they gave me a contact number of Bajaj Financial Service executive. So I called him and found that it is actually a Bajaj Financial Service offer to Univercell customers (which sells mobiles and accessories). Below are the features, which shared by an executive.
- ZERO PERCENTAGE interest rate!!!
- This is from Bajaj Financial Service.
- This offer is not for all mobile phones. However, to selected few models.
- One must have minimum Rs.20, 000 take home monthly salary.
- One must have Bajaj Financial Service EMI Card.
- If you have credit card then they will offer you lesser interest rate (Not disclosed how much lesser as he found me asking so many questions without zeroing on the mobile phone I am planning to purchase).
- Offer explained to me with an example as… Suppose you planned to buy Rs.10, 000 valued mobile phones then initially you need to pay first month instalment i.e. Rs.1, 000 (because the loan tenure is 10 months) +Rs. 750 as processing fees. So initially I need to pay Rs.1, 750 and for the next 9 months it will be monthly Rs.1, 000 only!!!
Legality of this offer–
Previous year RBI banned such loan offers which claim to be ZERO percent interest. Because such zero percent loan not at all exist. In return, lenders used to collect higher interest rates in the name of processing fees. This deal for many of us looks like a great offer. However, in reality it is nothing but one type of paying your interest in advance for your loan. Therefore, this is nothing but a scheme to allure customers as if they are offering you the product at cheap zero percent interest.
So how much it really cost you?
Before understanding how much it costs you, first let us understand the concept of APR or Annual Percentage Rate. Usually when you apply for a loan, along with interest rate lenders also charges some fees which are non refundable. The loan APR considers these costs along with an interest rate and will give you an exact cost of loan on annual base.
So the loan APR actually provides you the cost of your loan in terms of percentage on yearly base. When we consider above example, like I am planning to buy Rs.10, 000 mobile phones and for that initially I am paying Rs.1, 000 (First EMI) +Rs. 750 (Processing Fee). Then for the next 9 months I will be paying Rs.1, 000 monthly. When we calculate the Annual Percentage Rate of this, then this ZERO PERCENT LOAN will actually cost me 19.58% per year. You too can play with calculator by visiting HERE.
RBI banned the zero percentage EMI scheme. However, few shops offer you with different name but with the same concept, which is called ZERO PERCENTAGE. Whatever may be named, whether it is EMI or UMI, concept of loan is same and features differ to attract customers. Hope you do your homework before falling into such traps.
Are you really educated?
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Mythili
Hi, am Mythili from KK Nagar. I want to buy Redmi mobile. But my salary is 15K only. So how can I buy the mobile in EMI
Basavaraj Tonagatti
Mythili-Same cross question to you “Whether this is NEED or WANT for you?”
Shanmukha
Hello
This is shanmukha, I want to buy Redmi 3s prime gold 32 GB on emi basis. My net salary is 20700. What can I do
Basavaraj Tonagatti
Shanmuka-Best plan is to create an RD in Bank. Accumulate and then buy it. Never be in the trap of EMI.
siddhesh
Hi Basavaraj Tonagatti,
Dude lets take the example you given…where do you see the single rupee interest….the only you pay extra is the processing fee…
Basavaraj Tonagatti
Dear Siddhesh,
Increasing processing fee and claim ZERO interest is just gimmick. If you are unable to understand that one, then sorry to say that you don’t know how they are profiting by lending you money at FREE.
Thangam
I want to buy samsung galaxy j7 but in dont have credit card and bajaj card also please help how i can buy thru emi
Basavaraj Tonagatti
Thangam-Best option is to accumulate cash and then buy.
Archana
buying mobile through EMI is good r bad…. ? Iam totally confused by seeing the comments plzzzzz help me out
Basavaraj Tonagatti
Archana-Anything that is called buying through EMI is totally BAD. EMI meant for profit to lender (Bank) but not YOU. Accumulate amount then buy it that too only if it is necessary. Electronic goods are not assets but liability.
Adarsh
i am planning to buy samsung j7 in emi , and i dont have any credit cards. so please guide me….
Basavaraj Tonagatti
Adarsh-Save…Invest…Once accumulated, then go for shopping.
Naresh M
I want Sony m4 aqua instalment without credit card. What’s u need documents please guide me sir
Basavaraj Tonagatti
Naresh-I am not lender 🙂
P Udayakumar
sir , Rs-10,000 – 12,500 value Mobiles Phones is loan available
Basavaraj Tonagatti
Udayakumar-There are always lenders ready of they find a suitable eligible candidate. So don’t bother about that. Instead, check why you need this mobile, whether it is need or want and your financial condition.
Prasanth
Can i buy galaxy s6 through emi tell me the details
Basavaraj Tonagatti
Prasanth-Contact the lender.
kannan
Sir I need to buy mobile in EMI without credit card? if its possible pls guide me
Basavaraj Tonagatti
Kannan-Yes, there many in cue to in search of customers like you. But think before going ahead of buying. Nothing is free or ZERO interest.
yunus shaikh
i want buy samsung galaxy j7 in installm
ent without cridet card
Basavaraj Tonagatti
Yunus-How can I help you??
Sam
I Have Bajaj finance Card .. Shall i purchase the samsung Galaxy J7 Mobile ?
Basavaraj Tonagatti
Sam-Yes, but depending on how much limit they set for you and any outstanding loans you have with them.
Shwetha
Sir I need to buy mobile in EMI without credit card? if its possible pls guide me
Basavaraj Tonagatti
Shwetha-It is possible if your income matches the lenders conditions. But do you feel it is worth to buy the mobile phone on EMI??
sangeetha
how can i bu7y a mobile without credit card and what is the option for it
Basavaraj Tonagatti
Sangeetha-The simplest and best way is to ACCUMULATE the amount by saving monthly, then buy 🙂
S.Jeeva
Hi,,I’m planning to buy a Microsoft lumia 540 ,it is Rs.10000..Can I buy this product thru bajaj EMI card ?
Basavaraj Tonagatti
Jeevan-First understand whether this NEED or WANT?
kiran shet
Hi I want to buy mobile using Bajaj EMI card in Bangalore and where can I check for it
Basavaraj Tonagatti
Kiran-Check with Bajaj portal.
Avinash
We talk or compare the Rates of Interest in various schemes, but what is applicable definition for that Rate of Interest ? Interest rates cane be (1) Flat Rate (2) Simple rate of interest (3) Daily,Monthly,Quarterly or Half-yearly compoundable (4) Reducing balance rate and Zero Rate of Interest as explained. Why these are not defined with ” short IDs ” so that investor is not confused, rather be-fooled with these figures ?
Basavaraj Tonagatti
Avinash-Well said the motive is to confuse customers so that they simply agree and buy the product 🙂
harish
hi am planning to buy iphone 5s gold 16 gb and apple macpro laptop how much should i pay in first month can help me bro…… my contact no 8892853698
Basavaraj Tonagatti
Harish-I am not expert on the area you are asking 🙂 So sorry for not resolving your doubt.
Bharati
HI Basavaraj,
I brought a mobile online thru Credit Card EMI- 6 Months. Mobile price-6000/-. EMI Amt: 1035/-.
Totally 212/- extra for 6 months. No other charges.
I feel this is good deal to buy and with less interest.What you say about this…
Basavaraj Tonagatti
Bharati-Do you feel Rs.212 have no value? You visited the site link of calculator which I provided above? It shows the interest rate of around 14%. Do you feel getting loan at 14% is cheaper to you? Think twice to your investment also. It is hard to get 14% return for such short tenure but you are ready to make your Credit Card Bank richer at 14%. Strange na??
Sushila
And consider the cash discount that the lender will pocket.
Basavaraj Tonagatti
Sushila-Yes point to be noted 🙂