consumer durable loans

Why should you take a consumer durable loan?

Timely return of a loan makes it easier to borrow a second time.

Consumer durables have instilled a sense of convenience in life. From refrigerators to high-end mobiles, we are always on the hunt to upgrade our life as per our convenience. The consumer durable loan allows the users to buy refrigerators, washing machines, TVs, high-end mobiles, and other durables at affordable EMI.

What is a consumer durable loan?

It is a financing scheme offered by financial institutions to help the customers pay for the purchase of consumer durable items.

One should consider the following things before opting for consumer durable loan:

1. Hidden cost
There are a few 0% interest rate options available in the market for the loan. But these schemes have hidden costs like processing fees that get deducted from the loan amount that you receive. Once you opt for a consumer durable loan, make sure you check for hidden costs.

2. Down payment
Financial institutions provide consumer durable loans for up to 80%-85% of the actual price of the product, which means you make a down payment of 5-20% on the product cost.

3. Tenure
Tenure means the period within which the payment has to be made in via installments. Minimum tenure could be of 3 months and a maximum of 24 months.

Pros of consumer durable loan:

  1. Less documentation
  2. Easy to get.
  3. They are offered at a much lower interest than a personal loan and credit card.

Cons of consumer durable loan:

  1. One loses out the cash discount if you pay the full amount at the time of purchase.
  2. They involve hidden costs, like processing fees and prepayment fees.
  3. Has no cashback and reward benefits


Consumer durable loans are easy to get and thanks to the minimal documentation. The only documents you require for this process are:

  • Proof of income- Salary slip
  • Identity proof- Passport, Electricity bill, Telephone bill, Voter Id
  • Address proof- Passport

Also, KYC details, a cheque for the payment of first EMI and repayment mandate are the essential core documents.

Keep in mind:

  • 0% rate of interest + processing fee
  • Loan/purchase limit is an avg of up to 5 lakhs (for pre-selected products)
  • It is available for individuals between 18 – 65 years ( subject to eligibility criteria)
  • Purchase potential is limited to products approved by banks/ NBFCs

So if you are looking for festive season deals to make a purchase, then consumer durable loan is an apt option to consider. The charges of consumer durable loans are lower than credit card charges. Also, NBFCs join hands with retailers and brands to offer accessible consumer durable loan offerings in the festive season. Thus consumer durable loans are meant to fulfill the short term financial need. Individually buying these products may cost less, but buying multiple products at a time will surely go out of the budget. And for that reason opting for consumer durable loan is the best option.

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