Debit card EMI is a payment option that allows customers to pay for their purchases periodically. Instead of paying the full amount upfront, they can divide the total costs into small amounts. It is an option to convert payments made through debit cards into monthly instalments.

An EMI breaks the high-priced products and services into small value instalments that become affordable. Therefore, you can buy them even if you do not have enough money in your bank account at the time of purchase. The cardholders can pay through debit cards to make purchases and automate debit card EMIs of the total purchase amount.

Traditionally, EMI options were primarily available for credit cardholders. However, with the introduction of debit card EMIs, even those without a credit card can avail of this facility.

Let’s get into details about debit card EMIs, how it works and its benefits.

Debit Card EMI

How Does a Debit Card EMI Work?

A debit card EMI works in a similar way as traditional credit card EMIs.

Just like a credit card EMI option, it divides the total payable amount into EMIs. Then, it is added to your debit card statement.

Banks generally offer this facility to the account holders in the form of a pre-approved overdraft facility. The bank makes the payment to the seller on your behalf. Instead of a one-time payment, you have to pay back to the bank via EMIs. The bank collects the EMIs from your current or savings account linked to the debit card.

The amount is automatically deducted from your account each month like a recurring payment. This means that you do not have to worry about missing a payment or accruing interest. Just ensure that there are sufficient funds in your account each month.

Here is the step-wise process:

  • For debit card EMIs, you need to have a debit card with an active bank account linked to it. You will also need to check if the merchant or online store offers debit card EMIs as a payment option
  • Once you have confirmed that the store offers the debit card EMI option, you can opt for this payment mode. You can simply make your purchase by choosing the same payment option at checkout. You will then be asked to enter your debit card details and select the number of months you want to pay the amount. Basis the duration of repayment of the purchase amount via debit card EMIs, the instalment amount is calculated
  • Once the transaction is complete, the amount will be divided into equal monthly instalments and added to your debit card statement. You will then have to pay the monthly instalments and applicable interest charges

Example of Debit Card EMI

Suppose you need to pay Rs. 12,000 on an e-commerce website. If you opt for the debit card EMI option with a 6-month tenure, the bank will credit Rs. 12,000 to your account after approval from both the bank and the merchant.

From this account, the bank will do a direct payment to the seller for Rs. 12,000. Then, you will have to pay this amount back to the bank. You will pay back in fixed EMIs over the chosen 6-month period. It will amount to Rs. 2,000 per month plus any applicable interest and processing charges. Essentially, the bank is providing you with a loan of Rs. 12,000, which you will pay back in instalments. Keep in mind that the interest and processing fees for these EMI payments may vary depending on the bank.

Benefits of Debit Card EMIs

A debit card EMI offers several benefits. Some of the benefits of debit card EMIs are:

  1. Affordability: The first and foremost benefit that debit card EMIs offer is enhancing affordability. It increases the purchasing power of the customer. With small instalments of payments, you can go for high-ticket products/services without paying the upfront costs at once. From a business perspective, merchants that provide EMI options can also witness an increase in their average order value (AOV).
  2. Convenient Payment Option: It is convenient as the payment is done via a debit card linked to your bank account. All you need to do is maintain a sufficient balance for EMI payment. Moreover, there is an automatic deduction for these recurring debit card payments. Debit card EMIs allow you to make purchases on credit using your debit card as credit card penetration is quite low in the country. Only 3% of Indians use credit cards2 as they fear loans and credits and operate conservatively.
  3. No Credit Checks But Build Your Credit Score: Any kind of credit, loan disbursal or even providing credit cards requires a credit score check. However, debit cards or debit card EMIs do not require credit checks. Thus, it is a good option if you have a low credit score or no credit history. However, debit card EMIs count as a loan and therefore, it is reported to the credit bureau. So, it is a great opportunity for you to build or improve your credit score.
  4. Flexible Repayment Terms: Debit card EMIs allow you to choose the number of months in which you want to pay the amount. So, it provides you with flexibility in terms of repayment.
  5. No Collateral Required: Debit card EMIs do not require any collateral, making it a risk-free option for customers.
  6. No Hidden Charges: Debit card EMIs usually do not have any hidden charges. They state the rate of interest and the calculated EMI accordingly. They also display the processing fee if ant, making it a transparent payment option.

Challenges of Debit Card EMIs

While a debit card EMI offers several benefits, it also has some challenges that you need to be aware of:

  1. Interest charges: Debit card EMIs can come with interest charges, which are likely to increase the overall cost of the purchase.
  2. Limited availability: These EMI options are not available with all merchants and online stores. So, the customers may not always have this payment option available to them.
  3. Credit score impact: While the debit card EMI does not require credit checks but it will impact your credit score if you default on your payments.
  4. Limited purchasing power: The purchasing power of a debit card EMI is limited to the balance in your linked bank account, which may not always be sufficient for larger purchases.


What is the difference between credit card EMIs and debit card EMIs?

Debit card EMIs convert a purchase into monthly instalments (EMI) at the time of purchase. While credit card EMIs convert outstanding credit card balances into EMIs.

Are there additional charges associated with the debit card EMI?

In addition to interest rates and processing fees, the debit card EMI may also include late payment fees and foreclosure fees. These charges vary from bank to bank.

Can I purchase a phone on EMI using a debit card?

Yes, it is possible to purchase a phone on EMI using a debit card if the merchant allows debit card EMI as a payment option.

How can I check my HDFC debit card EMI details?

If you are an HDFC debit card user, you can send a message “MYHDFC” to 5676712 to check your EMI details.

Do all debit cards offer EMI facilities?

Not all debit cards offer EMI facilities. You will need to check with your bank to see if this feature is available for your debit card.

What is a no-cost EMI facility? Do debit cards offer a no-cost EMI facility?

A no-cost EMI facility allows you to pay only the total amount of the purchase without any additional charges such as interest, processing fees, or foreclosure fees. No-cost EMI is available on select debit cards.

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