Purchase of expensive home appliances and other luxury items doesn’t have to take a big chunk out of your monthly budget. Consumer durable loans make it possible to buy durable goods like ACs, televisions, oven, laptops, smartphones, etc at a reasonable rate of interest. Charging these products to your credit card would mean a high-interest charge, in case you are unable to pay the full total outstanding every billing cycle.
Rising Demand for Consumer Durables
Indian appliance and consumer electronics (ACE) market reached Rs. 76,400 crore (US$ 10.93 billion) in 2019. Appliances and consumer electronics industry is expected to double to reach Rs. 1.48 lakh crore (US$ 21.18 billion) by 2025.
- Work from home and virtual schooling has driven the demand for laptops and personal computers last year and continues to do so this year too.
- With lockdown and domestic help away the demand for electronic goods such as dishwasher and washing machine are on a rise. Government effort to electrify rural India is also a major contributor to this effect.
- All-time low home loan rates are expected to drive the sales of new homes. A new home would mean demand for new appliances.
Since the demand for consumer durable goods is expected to rise, it is essential that consumers are aware of this easy to avail and effective credit facility.
Some top benefits of the consumer durable loans include:
- Low-Interest Rate – Consumer durable loans are typically available at a lower interest rate than personal loans. Some institutions are offering this loan at a 0% interest rate.
- Minimal Formalities – No security requirements, easy application, and approval.
- Tenure – The loan tenure is usually between 3-24 months. This may differ from one lending institution to another. Choice of tenure will influence the interest rate applicable. A shorter duration might attract higher interest.
- Easy Disbursement – The loan amount is disbursed directly to the seller’s account and the repayment of the loan happens in installments.
- Offers Diversity to Your Credit Mix – Having the ability to handle different kinds of credit efficiently adds to your creditworthiness and thus improves your credit score.
To opt for a consumer durable loan or charge these goods on your credit card is a matter of your repayment discipline, your credit utilization, and your credit mix.
Suffice to know that consumer durable loans are great at improving the standard of living by making expensive lifestyles affordable. With low- interest rates, quick approval, minimal documentation, and instant loan disbursal, consumer durable loans are a smart choice over personal loans or credit cards to purchase durable goods.
For further guidance, feel free to reach out to our Debt Counsellors, we can help you get better at credit management.
