Bajaj Finserv EMI Card is a unique product where your purchase amount is automatically converted into EMIs. You can think of the product structure as a pre-approved loan. You can swipe or use the card (where the card is accepted) and the purchase amount will automatically be converted into EMIs. The attractive part is that you do not have to pay any interest on the loan amount. The rate of interest is zero percent. On the EMI card, you can take loan of up to Rs 3 lacs. You can repay the loan in 3, 6, 9 ,12, 18 or 24 months.
What Is the Difference between a Bajaj Finserv EMI Card and a Credit Card?
When you swipe your credit card, you have to make the full payment by the next payment date. So, you can get interest-free credit period for up to 45 days. In case of Bajaj Finserv EMI card, you settle your purchase by way of EMIs. There is no interest rate charged (rate of interest is 0%). Effectively, you do not pay anything extra.
By the way, even credit card companies give you an option to convert your purchases to EMI. They allow you to convert your outstanding balance to a personal loan. On that loan, you have to pay EMIs. However, those EMIs can come at a cost. You can read more about EMI on credit card balance transfer/EMI workings in this post.
Who Can Apply for the Card?
- You must be between 21 and 60 years of age.
- You must have a regular source of income. Not difficult to understand that a salaried person may find it easier to get this card. Students and self-employed may find it difficult to get this card.
How and Where Can I Apply for Bajaj Finserv EMI Card?
You can apply both online and offline.
Online: Online application process is only for existing customers (of Bajaj Finserv fixed deposits, loans etc). If you are an existing customer, you need to log in and make a payment of Rs 399 and the EMI card will be sent to you in a few weeks.
Offline: You can apply through Bajaj Finserv branches or partner stores (same stores where you want to make a purchase) too.
You need to provide the following documents while applying for the card:
- An identity proof
- An Address proof
- A Cancelled cheque
- Passport size photograph
- One NACH mandate (ECS mandate for auto-debit of EMIs)
I do not see any document for proof of income. It is possible they may insist on bank statement to see regular inflows in your account.
Types of Bajaj Finserv EMI Card
There are two types of cards.
- Gold EMI Card:
- Titanium EMI Card
I couldn’t find any difference between the two cards except for their joining fee. The joining fee for the gold card is Rs 412 while the joining fee for the Titanium card is Rs 884. As I understand, the loan amount is higher for titanium cards. There may be better shopping offers too.
Where Can I Use Bajaj Finserv EMI Card?
Don’t confuse Bajaj Finserv EMI card with a credit card. While credit cards are likely to be universally accepted, Bajaj Finserv EMI card can be accepted only at select stores and online websites, which have tied up with Bajaj Finserv. Bajaj Finserv claims that the EMI card is accepted at over 40,000 stores across India. You can find the complete list of stores here. You can expect acceptance to be higher at consumer durables and life style stores.
You can use this card for online shopping too. For instance, both Amazon and Flipkart allow you to make purchases using this EMI card. The good part is, on Flipkart and Amazon, you do not have to pay any extra money (processing fee/transaction charges etc). As I understand, everything is borne by these sites. In these cases, you truly have “No cost EMI”. For instance, if your order amount is Rs 18,000 and you choose an EMI of 3 months, you will have to pay an EMI of 6,000 per month. You do not have to pay a penny extra.
How Much Loan Can I Get with Bajaj Finserv EMI Card?
There is discrepancy in information on the Bajaj Finserv website. The minimum pre-approved loan amount is Rs 30,000 and the maximum is Rs 3 to 4 lacs. The limit will be shared with you when you are issued the card.
What Is the Rate of Interest Charged for Purchases on Bajaj Finserv EMI Card?
You do not have to pay any interest. Therefore, if you make a purchase of Rs 12,000 using this card and choose to pay off the loan in 6 EMIs, you will have to make six payments of Rs 2,000 each. You don’t have to pay anything extra.
How will Bajaj Finserv make money? You don’t have to bother. From your perspective, you shouldn’t worry much about the arrangement between Bajaj Finserv and the merchant. From Bajaj Finserv’s perspective, they will take full money from you but get some discount from the product seller/manufacturer. This discount (from what you pay to Bajaj Finserv and what Bajaj Finserv pays to the merchant) provides income for Bajaj Finserv. I have discussed how financial institutions make money on no-cost EMIs in this post.
Is There Any Other Cost or Transaction Charge That You Have to Incur?
This is important. In some cases, the merchant can charge you an upfront fee for using the Bajaj Finserv card. Now, this becomes upfront cost for you. For instance, if you purchase an item worth Rs 15,000 at a store. The merchant charges you an additional Rs 600 (for using Bajaj Finserv EMI Card). Effectively, you pay Rs 15,600. As a customer, you must guard against such situations. Such charges add to your cost of purchase. Essentially, the card will no longer be No-cost EMI card.
Can I Prepay the Loan Whenever I Want?
You can prepay (foreclose) the loan any time after 6 months from the date of purchase. There are no prepayment charges.
How Do I Pay EMIs for Bajaj Finserv Card?
At the time of applying for the card, you have to provide NACH (ECS) mandate to Bajaj Finserv. Through that ECS mandate, the EMIs will be automatically debited from your bank account. If you don’t make payments on time (can happen if you don’t have sufficient balance on date of EMI debit), you will have to pay penal interest and late payment fee. The details (quantum) about penal interest rate and late payment charges were not available on Bajaj Finserv website.
What if I Take the Card but Do Not Use It?
If you have not used the EMI card to make a purchase in the previous year, you will be charged an annual fee of Rs. 99 (plus GST). At 18% GST, it comes to Rs 117. Previous year means 12 months from last year’s validity month. Suppose you are issued card in June 2016. You made the purchases in the first year. Between June 2017 and June 2018, you didn’t make any purchase using the EMI card, you will be charged Rs 99.
If you have used the card during the previous year, you won’t be charged any annual fee.
Cross-selling. You can expect all kinds of sales calls to sell one or the other product from Bajaj Finserv. This happens with credit cards too.
Do not overspend. Since the EMI card provides “No-cost EMI”, you may tend to spend more than you usually would. You may view every purchase in terms of impact on monthly EMIs. Hence, an item may not seem as expensive. Rs 60,000 looks like a lot of money but somehow Rs 5,000 per month looks more manageable. There will be commercials to lure you.
Before using the card, see if there are any transaction charges. Such charges may spoil any benefits for you. In such cases, I would rather use a credit card instead of the EMI card. In my opinion, any Zero-Interest or No-cost card including Bajaj Finserv EMI card can be quite useful. However, you still need to use such cards with discretion. Understand the charges before swiping.
Disclosure: I have not applied for or used Bajaj Finserv EMI card. Hence, the information shared in this post is based on information available on Bajaj Finserv website and other online sources. There were a few conflicting pieces of information on the website. You are advised to talk to Bajaj Finserv customer care and seek clarification.