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Planning to buy a new phone? Three ways to fund your phone

Should you borrow money, pay the entire value, or take an EMI to purchase a phone?

Phones are also considered as a status symbol around the world by many young adults. For example, owning an iPhone X demonstrates that you are financially well off and ‘cool’. However, these high status phones are extremely expensive and are usually funded by their parents. Although, once you start earning your first pay check funding your phone on your own becomes exceptionally hard. This is why in India there are various ways to finance a phone. Financing a phone can become a debt which you have to eventually pay off and it may be increasingly hard to pay off that phone if you lose your job.

Personal Loan

Many individuals can take a personal loan in order to pay for their phone. However, this will have an 11% interest rate. This is exceptionally high. Additionally, it will take a long time for the bank to pass this loan due to processing time. This method for paying for a phone is extremely costly and time-consuming. Additionally, the phone will be held as collateral thus meaning that if you fail to pay for your phone then they have the right to take your phone away.


EMI stands for equated monthly instalment. An EMI for a phone is one of the most common options for funding a phone. EMI basically allows you to pay a fixed monthly fee. EMI can charge interest however recent there have been several cases of where 0% interest is charged on EMI. This makes the EMI option much cheaper than a personal loan. Additionally, people believe that the EMI is a better option because it provides an individual with the exact amount they must pay every month. This allows for better monthly budgeting so that the individual is able to pay for the phone without defaulting.

Pay through savings

This option basically states that you must pay for the phone through your savings account. This means that the individual would have to be saving up the money for a while in order to afford the phone and to use the entirety in purchasing the phone of their choice. This can include paying for your phone through a debit card or even a credit card if you have to capacity to pay back the debt in a month. This type of payment plan has one advantage is that you will end up not having to pay the interest and you would be the boss of your phone from day one.

To conclude, purchasing a phone is an essential part of everyday life. However there are numerous ways to finance your phone. It all depends on the option that you want to choose. However, saving on a regular basis in a recurring account can help you to buy your dream phone easily. In many cases, you will know the model and features of the phone that is going to be launched in the next 6 months or a year. If you have eye on any of these phones that are yet to be launched, you can set up a RD of six month. For e.g., the phone that you are eyeing is priced at Rs.75,000, you  can open a six month RD where you can save Rs.12,500 per month.

If saving nearly Rs.12,500 a month is not in your budget, then save as much as you can in your RD and the fund the rest of it through EMI or personal loan.

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