Planning to buy the iPhone 14 on EMI? STOP! Avoid Crippling Debt, know how

With the Apple ‘Far Out' event scheduled for September 7, it is likely that the iPhone 14 series will be launched during the event. And people of all ages will be looking to buy the upcoming smartphone with improved features and specifications. And undoubtedly, many would also be buying it on EMI if they cannot afford it directly. However, those of you who will be looking for either credit card based EMI or platform based EMI should be very careful because paying off the EMI along with the interest can be a tricky thing to manage. So, what are some of the things you should keep in mind? Read on to find out.

According to SEBI registered tax and investment expert Jitendra Solanki, EMI should be entirely avoided if possible. Speaking with HT Teh, he said, “EMI is an easily available tool today. You can even get it on a credit card. But it is a credit card loan you're taking with high interest rates. And if you're not able to repay your credit card bills, your CIBIL (Credit Information Bureau (India) Limited) score goes bad. For a youngster, a bad CIBIL score can mean trouble getting loans at a later age”.

So, is all hope lost and should you give up on your dream of owning the iPhone 14 because you cannot pay for it upfront? Not really. “You should always check if you can afford the EMI”, added Solanki. So, how can one do that? Let us check a basic health-check before going to buy the upcoming Apple smartphone.

The Do's and Don'ts of the EMI game if you want to own an iPhone 14

The iPhone 14 base model is likely to be around the same price as the iPhone 13. There are some talks of it being a little cheaper as well, although we have to wait for the launch to find out for sure. However, assuming the price remains the same, the iPhone 14 should set you back by Rs. 79,900. With that in mind, let's take a look at the checklist before you consider an EMI.

1. EMIs should never be for a longer period of time as it compounds the interest that you pay over it. Always check if you can pay off it between 3-6 months. If longer, it is probably a good idea to not buy it.

2. Before you take the EMI, you should ensure that you have savings of 1.5x the money you are taking a loan for. So, to buy the iPhone 14, you should ideally have upward of Rs. 1 lakh in your account. You may not want to spend it all on the iPhone, which is understandable but this ensures that even if you lose an income, you can still pay off your debt and your CIBIL score does not take a hit.

3. Don't take an EMI if your CIBIL score is bad because you will have to pay a higher interest rate or get a bad deal. If that's the case, your priority should be to improve the CIBIL score and then buy the iPhone 14.

4. Always compare and analyze. Do not take the first EMI option that you see. If you own a credit card from more than one bank account, compare them. Then compare the best from the platform-based EMI (on Amazon or Flipkart).

5. Never miss your payments. Missing EMI payments will add penalties to your loan and shoot down your CIBIL score.

These steps might seem a little too strict, but they will save you from making a bad financial decision. After all, if not the iPhone 14, you can always wait for the iPhone 15.