Since building or renovating a home is not a recurring expense, people often try to choose the best option available, even when the budget exceeds home loan and restocking limits.
With so many stunning yet expensive interior design options available on the market, you might be tempted to break your already exhausted home construction/renovation budget to go the extra mile and grab the best items available to decorate your dream home to buy.
Because building or renovating a home is not a recurring expense, people often try to choose the best option available, even when the budget exceeds the home loan and restocking limits.
In such a case, you may need to explore the options available to borrow more money. Three of these options are Personal Loan, Credit Card and Buy Now Pay Later (BNPL).
“As a form of consumer credit, all three options — personal loans, credit cards, or BNPL — are somewhat similar in nature, allowing one to purchase or avail consumer services up front with repayment over a period of time,” said Amit Chaturvedi, Co -Founder Paytail.
“However, the difference in the repayment period and interest rate sets them apart. The credit card has the shortest repayment period, but the highest interest rate (if carried forward). The credit card and personal loan also require certain parameters and are often not offered to people with NTC (New to Credit),” he added.
Chaturvedi explains how BNPL stands out as a concept in terms of the flexibility it offers –
- Zero percent interest in some special cases
- Digital sharing in real time
- Credit offers to a person new to credit
- No or no handling fee
- Better transparency
“Given the higher benefits associated with BNPL, opting for BNPL is a better deal than a personal or credit card loan,” Chaturvedi said.
Commenting on the three lending options, Anil Pinapala, CEO and Founder of Vivifi India Finance said: “The best option would be BNPL as it does not change the price significantly and individuals have a longer repayment period than a credit card where the free one time is much less. You have to look for offers and wherever they are available, purchases made through BNPL, like FlexPay offers, should be the first choice.”
“But if a person is looking for flexibility in repayment while paying a little interest, then a credit card could be an option. However, if you are confident that you can repay in less time then our advice would be BNPL. Personal loans, on the other hand, should be avoided for the purchase of home accessories unless you need a two to three year repayment period,” Pinapala added.
Anshuman Narain, Vice President of CashBean (PC Financial Services Pvt Ltd) said on the subject: “Unless the home loan is at its maturity date, one would advise to always go with something like BNPL. This is because BNPL can come on the product with no additional interest and is more transparent in its details and fees than credit cards. It is recommended that for any loan you may need as an emergency, a personal loan is the best option as it pays off quickly and is usually short-term and therefore does not add much to your long-term debt.
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