Cred has a section called on-time payments in their credit report section
If you purchase a product worth Rs 100000 using no cost emi for a period of 6 months. Would this affect your credit score?
If you pay each of the no cost emi bills before the due date, would it still be considered as an on-time payment?
It will be considered as on time payment, but could have 20-30 point impact on the credit score. As banks always charge the interest, it's the seller who gives upfront discount of interest value at payment time.
if you have cash lying around, call the cc company and pre-close the emi you'll get to pocket the interest difference.
For example. ₹100000 item bought at no cost emi of 6 month will be billed as ₹93000 on your cc, bank will then take monthly installments in breakup as 15500 principal + 1200 interest + 200 gst on interest, summing up to little over 100k
If you cancel emi and pre pay the outstanding you'll only have to pay 93000k + 500-1000 fee, cancelling emi can also be free if done within a week
Thank you @tbk
Isn't there typically a charge sometimes if you foreclose an EMI?
Genuine question: do banks in India actually use credit score to determine loan interest rates for things like home loans? If yes, any real examples anyone has of the difference? Never had a credit card or felt the need for one, but wondering if I should have it (and no, anyone who says credit score matters in India as much as in, say the US, is simply lying to you)
Credit score would matter less in India. Apart from loans, very few employers do a hard pull before extending offers. But Indian finance and credit history system is young and fast changing. The importance of cibil is unimaginable in a decade's time. Good Landlords might start asking, schools might force parents for credit cheque etc. The private enterprises are too shalow to just judge you on the visible cibil score and not process your credit history.
