Financial Experts Share Tips on Managing Festive Season Loans and EMIs
Understanding repayment affordability and evaluating total costs can help consumers avoid excessive financial strain during peak holiday shopping periods.
As the October through December festive season brings a surge in consumer expenses for clothing, electronics, travel, and gifting, financial experts are urging shoppers to carefully evaluate their repayment affordability before taking on new loans or equated monthly installments (EMIs).
While credit cards, personal loans, and buy-now-pay-later products allow consumers to spread payments over time, manageable smaller installments can often disguise the true financial impact and increase long-term commitments. According to experts, the crucial factor is not merely whether a monthly payment fits into a current budget, but rather understanding the total cost of the purchase.
Bhargav Errangi, founder of the fintech and commerce platform POP, noted that splitting purchases into smaller installments can assist younger consumers in balancing holiday shopping with everyday expenditures. However, he warned that payment flexibility can sometimes push buyers toward more expensive products or encourage larger purchases that exceed their original budgets.
Echoing these concerns, Kundan Shahi, founder of the loan repayment and settlement platform Zavo, advised shoppers to account for overlapping installments and existing financial obligations before utilizing credit options. Several individually manageable payments can quickly accumulate into a substantial monthly cash outflow, creating unexpected pressure on household finances.
Mahesh Shukla, founder and chief executive officer of the fintech company PayMe, suggested that consumers keep their total monthly EMIs—including any existing loan repayments—within 40 to 50 percent of their take-home income. He recommended maintaining an even lower limit for individuals with irregular earnings or financial dependents, emphasizing that this guideline serves as a useful rule of thumb rather than a universal threshold.
Before committing to new financing, shoppers are advised to thoroughly examine the total cost of items, including interest rates, processing fees, and additional charges. Financial specialists also recommend considering repayment tenures, payment terms, late-payment penalties, and future income stability to ensure that obligations remain manageable long after the festive season concludes.