Several Indian banks have recently introduced EMI (Equated Monthly Instalments) option on debit cards. It is an easy and affordable way to make big-ticket purchases without having to worry about the erosion of savings. However, only eligible cardholders can avail of this option. In this article, we have explained in detail how to check debit card EMI eligibility and how debit card EMI works.
What is EMI on a Debit Card?
A debit card EMI is a payment facility available on certain debit cards that allows you to convert your online or offline purchases into small, affordable EMIs. It is similar to a credit card but is considered an overdraft by the bank, and the bank makes the payment to the merchant on your behalf.
Once the payment is made, the bank cuts a certain amount from your account every month as EMI. The debit card EMI is calculated based on the amount you spend, your chosen tenure, and the interest rate the bank charges. Since it is an overdraft facility, the bank levies the applicable interest rate.
A debit card EMI is beneficial for people who do not qualify to get a credit card or who are not comfortable using a credit card. Moreover, it is also useful for people who do not want to erode their savings while making a big ticket purchase.
Which banks offer EMI on Debit Card?
In India, the following banks offer EMI on debit cards:
- HDFC Bank
- SBI
- ICICI Bank
- Kotak Bank
- Axis Bank
- Federal Bank
- IDFC First Bank
- Punjab National Bank
- IndusInd Bank
Features and Benefits of Debit Card EMI
The following are the features and benefits of debit card EMI.
- Flexible repayment option: Banks allow you to select a tenure between 3 and 36 months to repay your debit card EMI dues.
- No documentation: To get an overdraft facility on your debit card, you do not have to submit any documents or wait for the bank’s approval.
- Easy money: When you make big-ticket purchases above Rs 5,000 and do not want to create a dent in your savings, you can use the debit card EMI facility. Banks usually allow transactions ranging between Rs 5,000 and Rs 5 lakh for an EMI facility on a debit card. The minimum and maximum transaction limit varies across banks.
- Instant approval: Unlike credit cards, you do not have to wait for days or weeks to get the bank’s approval to use the EMI facility on your debit card.
- No down payment: When you use a debit card EMI facility at any of the approved merchants, you need not pay any down payment. The bank will give you 100% finance on your purchase.
- Pre-closure: When you have surplus funds, you can pre-close your loan. However, some banks can charge a small fee for the pre-closure of your debit card EMIs.
How Does Debit Card EMI Work?
A debit card EMI is a convenient option to make purchases online and offline in affordable instalments using your debit card. When you make a purchase online, you will be presented with an option of debit card EMI at the time of checkout. You will have to choose that option to avail a debit card EMI. After the approval from the bank and the merchant, the amount will be credited to your bank account by the bank. You will have to repay this amount in small instalments during the tenure. The bank usually auto-debits your account every month until you repay your dues in full.
For offline purchases, you must tell the merchant to swipe the card in debit card EMI mode and punch in the desired tenure. The bank will sanction the transaction as per the balance in your savings account. The transaction is rejected if the limit in your savings account is less than the purchase you make. After the transaction is approved, you sign the charge slip agreeing to all the terms and conditions, and the money you spent for purchasing the product via debit card EMI mode will be credited to your account within three days. The bank then debits the EMI amount every month until you repay your dues.
How to Check Debit Card EMI Eligibility?
If you want to know if you can use your debit card for an EMI (Equated Monthly Installment) option, several well-known banks like HDFC, ICICI, Axis, SBI, Federal Bank, and Bank of Baroda provide this service. However, the eligibility requirements can vary from bank to bank.
To check your eligibility, you’ll need to review each bank’s specific criteria. Generally, banks look at factors like your account balance, transaction history, and income to determine if you qualify for debit card EMIs. It’s a good idea to visit the bank’s website or contact them directly to get the most accurate information for your situation. You can also send them a message by referring to the table below.
| Bank | SMS Code | Interest Rate | Tenure |
| HDFC Bank | ‘MYHDFC’ to 5676712 Via Missed Call to 9643 22 22 22 | 16% | 3 to 24 months |
| SBI | DCEMI to 567676 | 15.10% | 6 to 18 months |
| ICICI Bank | DCEMI to 5676766 | 16% | 3 to 12 Months |
| Kotak Bank | DCEMI to 5676788 | 17.1% | 3 to 12 Months |
| Axis Bank | DCEMI to 56161600 | 14% | 3 to 12 Months |
| Federal Bank | DCEMI to 5676762 or give a missed call to 7812900900 | 16% | 3-36 months |
| IDFC First Bank | EASYBUY to 5676732 | 16% | 3 to 24 Months |
| Punjab National Bank | DCEMI to 9264092640 | 17.25% | 3 to 24 Months |
| IndusInd Bank | MYOFR to 5676757 | 17% | 3 to 24 Months |
Last updated: 1st October 2024
How to Apply for an EMI Facility on a Debit Card?
The following is the process of availing EMI on our debit card.
- Check your eligibility: if you hold a debit card from any bank, check whether the debit card EMI is available to you. You can use the SMS codes given above to check whether the facility is available to you.
- Check for product eligibility: The EMI facility is only available on certain products. Hence, checking whether the product has a debit card EMI facility is important.
- Select the option: On the checkout page of your shopping website, select a debit card, and then select the EMI option.
- Select the tenure: You must select the tenure that is comfortable for you. Banks usually offer a tenure ranging from 3 months to 36 months.
- Authenticate: After providing all the necessary details, authenticate the transaction with an OTP.
- Refund: The banks block the amount you purchased in your bank account until the EMI transaction is complete. Once the EMI transaction is complete, the bank will deposit the money you purchased into your account.
- EMI payment: From the next month onwards, the bank will debit the EMI amount from your account.
Fees and Charges of Debit Card EMI Facility
Banks charge certain fees to make the debit card EMI option available to you. It is important that you know all the charges associated with debit card EMI. The following are the different fees the bank charges, which vary across banks.
- Processing fee: banks charge a processing fee from you to cover the administrative costs associated with converting a purchase into instalments.
- Interest: Interest is charged on the loan you take through your debit card. This ranges between 10-30% per annum.
- Late payment fee: In case you fail to repay your EMI or pay it partially, banks charge a certain penalty on the outstanding EMI.
- Auto debit return: In case you do not have sufficient funds and the auto-debit transaction fails, then banks charge a penalty.
- Pre-closure charge: Many banks also charge a pre-closure penalty if you close your debit card EMI loan earlier than the due date.
How is Debit Card EMI Different from No Cost EMI?
Debit Card EMI and No Cost EMI may sound similar, but they work differently. With No Cost EMI, you don’t pay anything extra beyond the product’s price. There’s no interest or processing fee added, and if there are any fees, they’re usually covered through discounts. This means the total you pay through EMIs is the same as the price of the product. No Cost EMI deals depend on offers between the merchant and the bank, so they might change depending on the timing or the company you’re buying from.
On the other hand, Debit Card EMI functions more like a loan. The EMI amount is transferred to your account as a loan, and you have to pay interest along with a processing fee. This means the total amount you pay through EMIs will be higher than the actual price of the product because interest gets added.
For example, if you buy something for ₹18,000 on a Debit Card EMI plan over 3 months, you might be charged a ₹99 processing fee and 12% annual interest (or 1% per month). So, your monthly EMI would include these extra charges, making the total cost as follows:
| Duration | No-Cost EMI | Debit Card EMI |
| Month 1 | Rs. 6,000 | Rs. 6,000 + Rs. 99 (processing fee) + Rs. 180 (1% of Rs. 18,000) = Rs. 6,279 |
| Month 2 | Rs. 6,000 | Rs. 6,000 + Rs. 120 (1% of Rs. 12,000) = Rs. 6,120 |
| Month 3 | Rs. 6,000 | Rs. 6,000 + Rs. 60 (1% of Rs. 6,000) = Rs. 6,060 |
| Total Paid | Rs. 18,000 | Rs. 18,459 |
Things to Keep in Mind Before Opting for Debit Card EMI Facility
Before using the debit card EMI facility, it is important to keep in mind the following points.
- Eligibility: Only eligible cards and cardholders have the EMI facility on the debit card. Hence, it is best to check with your bank for the same.
- Availability: Certain product categories and merchants have the option of debit card EMI. Hence, check with the merchant before buying a product.
- Opting for EMI: Whether it is an online or offline purchase, make sure you select the debit card EMI option.
- Fees and other charges: Understand the fees and other charges that the bank will levy on your purchase before the option for the debit card EMI.
- Repayment: Make sure you repay your debit card EMI dues on time to avoid late fees and penalties.
Difference between Debit Card EMI and Credit Card EMI
The following table highlights the difference between debit card EMI and credit card EMI.
| Basis of Difference | Debit Card EMI | Credit Card EMI |
| Sources of funds | Credit limit on the card | Savings account |
| Eligibility | All credit card holders | Selective debit card holders |
| Documentation | Is necessary | Not necessary |
| Conversion | Can be converted into EMI post-purchase | Have to opt for it before the purchase |
| Repayment flexibility | Long-tenure options available | Limited tenure options when compared to a credit card |
| Credit score | Can impact the credit score | May not impact the credit score |
| Rewards and benefits | Credit cards offer reward points on each transaction | Limited rewards on debit cards when compared to credit cards |
Conclusion
Debit card EMI is an excellent credit facility available to debit card users to make big-ticket purchases. It can help you repay your dues in affordable instalments without having to rely on credit cards. However, it is important to note that only eligible card holders can avail of this facility, and the banks charge fees and penalties upon late payment of your dues. Hence, it is important to use the debit card EMI facility with utmost caution, similar to a credit card EMI option.
