Consumer Durable Loans: Consumer durable loans are becoming a common way for new borrowers to enter India’s formal credit system. CRIF Highmark’s September 2026 How India Lends report says these loans made up 45.5% of new-to-credit loan originations by volume in Q1 FY27. The report defines NTC borrowers as people taking their first loan with no earlier credit history.
These loans are popular because they’re quick and often available at the shop itself. But a low EMI or a “zero-cost” offer doesn’t always mean the loan is completely free.
Why New Borrowers Choose Consumer Durable Loans
Consumer durable loans usually involve smaller amounts and limited paperwork. Harsh Grover, co-founder, LoansJagat, says, “Low ticket sizes and minimal documentation allow lenders to sanction loans using basic know-your-customer (KYC) information for borrowers with no repayment history.”
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Timely repayment can also help a first-time borrower start building a credit record. Since financing is offered at the point of purchase, the borrower can get the loan soon after choosing the product.
Still, a long repayment period can make the total cost higher even when the monthly EMI looks small. Missing one payment can also hurt a borrower with a short credit history.
Understand Zero-Cost EMI
Zero-cost EMI usually means the borrower doesn’t directly pay interest. Santosh Agarwal, CEO, Paisabazaar, says, “The manufacturer, merchant or platform subsidises the interest at the time of purchase.”
But extra charges may still exist. Grover says, “A no-cost EMI offer may recover the interest through a processing fee or an absorbed discount.”
Before accepting the offer, compare the full cash price with the EMI price. Also check the APR, total amount payable, processing fees, taxes, convenience charges, foreclosure costs, late fees and bounce charges. RBI rules require applicable regulated lenders to provide key loan-cost information in a KFS.
Kumar says, “Calculate the net effective cost by comparing the full cash price with the zero-cost EMI price.”
Check the Lender and Your Repayment Ability
Always check who is providing the loan. Kumar says, “Ensure that it is a Reserve Bank of India-registered bank or non-banking financial company.”
Borrowers should also limit unnecessary access to personal data. Kumar says, “Ensure that digital consent covers only data necessary for underwriting rather than the full device or contact list.”
Check the e-NACH or auto-debit mandate too. Its amount, frequency and validity should match the EMI schedule.
Grover says “NTC borrowers should treat 40 per cent as the upper limit rather than a target.” Count existing EMIs and the new EMI against net monthly take-home income. Avoid another consumer durable loan before making substantial repayment on the first one.
If an auto-debit fails, keep enough money in the account before the next attempt. Pay manually within 24 to 48 hours and contact the lender. Grover says, “Clearing dues before the next credit-bureau reporting cycle may limit fees and damage to the credit score.”
A one-off failure may justify requesting a fee waiver. Those facing repayment problems should contact the lender early and put any restructuring request in writing. Section 25 of the Payment and Settlement Systems Act, 2007 covers dishonour of certain electronic funds transfers.
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Tenures, rates and charges
- Typical tenure: Three to 24 months; goes up to 60 months
- Loan amount: A few thousand rupees to ₹50 lakh
- Interest rate: Zero; or single digit to nearly 40%
- Processing fee: Around 4–12% of loan amount; ₹99 to ₹2,500 plus GST or more in absolute terms
