Everything You Should Know About Consumer Durable Loans

By | September 16, 2017

Everything You Should Know About Consumer Durable Loans

Be it a festive season, the scorching summer or the launch of a must-buy extraordinary gadget, the demand for consumer durable products like ACs, refrigerators, TVs, smartphones, laptops, furniture and other home appliances never ceases.

With sales, discounts and varied financing options, retailers as well as banks are always looking to lure customers into the world of consumer durables. While Credit Cards have become the most popular financing option, there are other schemes to help you finance your consumer durable purchases. Before swiping your Credit Card, why not take a look at consumer durable loans? Ready? Let’s explore.

What is a consumer durable loan?

It is a financing scheme offered by financial institutions to help customers pay for the purchase of consumer durable items. These are usually products that come with a warranty period. Consumer durable loans can be used to purchase AC, TV, washing machine, refrigerator, laptop, computer, microwave, kitchen appliances, smartphone, furniture and other products.

Things to consider before opting for a consumer durable loan

Interest Rate

While choosing a consumer durable loan, the interest rate should be one of the most important deciding factors as it determines the amount of interest you will need to pay. While interest rates differ from one institution to another, generally the rates for these loans are lower when compared to the rate of interest that you might pay for your Credit Card balances and Personal Loans. Sometimes, financial institutions offer 0% interest rate schemes on select consumer durable products.


The tenure of a consumer durable loan determines the number of instalments you need to pay and the amount that needs to be paid every month. Usually, the tenure of a consumer durable loan can be anywhere between 3 months and 24 months depending on the financial institution and the product that you have purchased. Try to opt for a lower tenure so that you can repay the loan without shelling out much in interest.


Generally, financial institutions provide consumer durable loans for up to 80%-95% of the actual price of the product. This means that you need to make the down payment which can be 5%-20% of the cost of the product. So before hopping on to the consumer durable loan bandwagon, be aware of the amount of loan the lender is offering and make arrangements for the down-payment.

Hidden costs

There are a few 0% interest rate options available in the market for consumer durable loans. But these schemes often have hidden costs such as processing fees which will be deducted from the loan amount that you will receive. That’s not all, by opting for a 0% interest rate scheme you throw away the cash discount which you could have availed if you had paid the full amount at the time of purchase. Keep these hidden costs in mind before you actually opt for 0% interest rate loans.

Additional Reading: 11 Things You Can Save Money On Every Month


Consumer durable loans are fast and easy to avail, thanks to minimal documentation and instant approval. You just need to provide a copy of some of the documents listed below.

  1. Identity Proof – Driver’s License, Voter ID, Passport.
  2. Address Proof – Passport, Electricity bill, Telephone bill.
  3. Proof of Income – Salary Slip or Form 16.

Is the product worth it?

It’s good to consider whether you really need the product before opting for a consumer durable loan. The shelf life of many consumer durable products is low and their resale value is almost negligible. There might be chances that you might want to replace the product with another one within a year or two.

Additional Reading: Where Did the Money Go? 10 Ways to Save More of Your Paycheck

Pros of consumer durable loans:

  1. They are very easy to avail, thanks to minimal documentation.
  2. They are offered at interest rates much lower than Credit Cards or Personal Loans.

Cons of consumer durable loans:

  1. They involve hidden costs like processing fee and prepayment fee.
  2. You lose out on the cash discount that you could have availed of if you had paid the full amount at the time of purchase.

Additional Reading: How To Choose The Best Credit Card For You

Over the years, there has been a steady decline in consumer durable loan schemes. Thanks to the rise in popularity of Credit Cards. Though consumer durable loan schemes are on a decline, banks like HDFC, Dena Bank and finance groups like Bajaj Finserv are still active in the market.

BankBazaar’s take: You could opt for a Credit Card and avail the facility of easy EMIs. Just ensure that you make those Credit Card payments on time until the full amount is repaid.

All information including news articles and blogs published on this website are strictly for general information purpose only. BankBazaar does not provide any warranty about the authenticity and accuracy of such information. BankBazaar will not be held responsible for any loss and/or damage that arises or is incurred by use of such information. Rates and offers as may be applicable at the time of applying for a product may vary from that mentioned above. Please visit www.bankbazaar.com for the latest rates/offers.

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