disadvantages of EMI system
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Disadvantages of EMI:
Longer Debts: The borrowers have to pay the monthly installments or EMIs until they are done with the principal amount and the applicable interest rate. In terms of home loans or car loan these tenures go as long as 20 to 30 years. That means a borrower spends nearly half of his or her life repaying the loan installments. This restricts the borrower from buying any other such luxurious utilities in near future.
No Early Repayment: If a borrower wishes to pay back the loan faster than anticipated by using extra savings or a bonus, banks do not offer an easy option to do so. Many banks and NBFCs charge an early repayment fees to such borrowers. This makes it difficult for the borrowers to pay off the loan earlier even if they could.
Charges on Skipping EMIs: If a borrower forgets or misses to pay the said EMI on or by the given date, banks and NBFCs charge the borrower with late fees. Banks and NBFCs have strict terms when it comes to repayment through EMIs. Skipping multiple EMIs may lead the borrower to face legal action or their collateral can be taken away by the bank.
Extra Costs: The borrower has to pay extra amount than the actual borrowed amount in form of interest rate. As the principal amount and interest rates are combined to form an EMI, the borrower can’t avoid paying this extra amount.
Longer Debts: The borrowers have to pay the monthly installments or EMIs until they are done with the principal amount and the applicable interest rate. In terms of home loans or car loan these tenures go as long as 20 to 30 years. That means a borrower spends nearly half of his or her life repaying the loan installments. This restricts the borrower from buying any other such luxurious utilities in near future.
No Early Repayment: If a borrower wishes to pay back the loan faster than anticipated by using extra savings or a bonus, banks do not offer an easy option to do so. Many banks and NBFCs charge an early repayment fees to such borrowers. This makes it difficult for the borrowers to pay off the loan earlier even if they could.
Charges on Skipping EMIs: If a borrower forgets or misses to pay the said EMI on or by the given date, banks and NBFCs charge the borrower with late fees. Banks and NBFCs have strict terms when it comes to repayment through EMIs. Skipping multiple EMIs may lead the borrower to face legal action or their collateral can be taken away by the bank.
Extra Costs: The borrower has to pay extra amount than the actual borrowed amount in form of interest rate. As the principal amount and interest rates are combined to form an EMI, the borrower can’t avoid paying this extra amount.
Answered by
0
Disadvantages of EMI:
Longer Debts: The borrowers have to pay the monthly installments or EMIs until they are done with the principal amount and the applicable interest rate. In terms of home loans or car loan these tenures go as long as 20 to 30 years. That means a borrower spends nearly half of his or her life repaying the loan installments. This restricts the borrower from buying any other such luxurious utilities in near future.
No Early Repayment: If a borrower wishes to pay back the loan faster than anticipated by using extra savings or a bonus, banks do not offer an easy option to do so. Many banks and NBFCs charge an early repayment fees to such borrowers. This makes it difficult for the borrowers to pay off the loan earlier even if they could.
Charges on Skipping EMIs: If a borrower forgets or misses to pay the said EMI on or by the given date, banks and NBFCs charge the borrower with late fees. Banks and NBFCs have strict terms when it comes to repayment through EMIs. Skipping multiple EMIs may lead the borrower to face legal action or their collateral can be taken away by the bank.
Extra Costs: The borrower has to pay extra amount than the actual borrowed amount in form of interest rate. As the principal amount and interest rates are combined to form an EMI, the borrower can’t avoid paying this extra amount.
Longer Debts: The borrowers have to pay the monthly installments or EMIs until they are done with the principal amount and the applicable interest rate. In terms of home loans or car loan these tenures go as long as 20 to 30 years. That means a borrower spends nearly half of his or her life repaying the loan installments. This restricts the borrower from buying any other such luxurious utilities in near future.
No Early Repayment: If a borrower wishes to pay back the loan faster than anticipated by using extra savings or a bonus, banks do not offer an easy option to do so. Many banks and NBFCs charge an early repayment fees to such borrowers. This makes it difficult for the borrowers to pay off the loan earlier even if they could.
Charges on Skipping EMIs: If a borrower forgets or misses to pay the said EMI on or by the given date, banks and NBFCs charge the borrower with late fees. Banks and NBFCs have strict terms when it comes to repayment through EMIs. Skipping multiple EMIs may lead the borrower to face legal action or their collateral can be taken away by the bank.
Extra Costs: The borrower has to pay extra amount than the actual borrowed amount in form of interest rate. As the principal amount and interest rates are combined to form an EMI, the borrower can’t avoid paying this extra amount.
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