Pre-closing credit card EMI

Vaastav said:

Update :- I received message From my Friend and He Told me that ICICI doesn't Charges anything If EMI is Foreclosed and You just have to call To cancel the EMI by calling their Phone Banking. So I went ahead with it and to my Surprise I wasn't Charged Anything Moreover The Processing Charges Were also Refunded.

So In The End Both Rtx 3080 ti and 5950x Costed me 106784 and there is another 3k in Affiliate Cashback.

This Is What I call a deal. Thanks For Posting this Offer

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I had done the same with an ICICI 3-month EMI in the past. The only reason I had done so was because at that time there was no discount for upfront payment but a 10% one for no-cost EMI.

On the whole, it did cost around 3% more but with the 10% discount, it meant 7% savings. However, the foreclosures do have a negative impact on the credit score, so it is not something you should be doing regularly.

t3chg33k said:

I had done the same with an ICICI 3-month EMI in the past. The only reason I had done so was because at that time there was no discount for upfront payment but a 10% one for no-cost EMI.

On the whole, it did cost around 3% more but with the 10% discount, it meant 7% savings. However, the foreclosures do have a negative impact on the credit score, so it is not something you should be doing regularly.

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I think OP meant paying off EMI instead of waiting it out. This has no negative impact, IMO should boost the CIBIL score instead (don't know though). I paid off my loan early to avoid unnecessary interests that would have otherwise accumulated if I stuck to the repayment plan.

Bank taking your collateral for unpaid loan surely negatively impacts CIBIL score.

OMEGA44-XT said:

I think OP meant paying off EMI instead of waiting it out. This has no negative impact, IMO should boost the CIBIL score instead (don't know though). I paid off my loan early to avoid unnecessary interests that would have otherwise accumulated if I stuck to the repayment plan.

Bank taking your collateral for unpaid loan surely negatively impacts CIBIL score.

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It is counterintuitive, but foreclosures make you an unreliable borrower and burdens the bank with money that it needs to lend again, instead of earning interest on it. Hence, it is seen as a negative by lenders.

t3chg33k said:

It is counterintuitive, but foreclosures make you an unreliable borrower and burdens the bank with money that it needs to lend again, instead of earning interest on it. Hence, it is seen as a negative by lenders.

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I don't know how exactly CIBIL works, but for checking if someone can be given a new credit, that person paying off credit early should not be seen as a negative, again just my opinion. Your point makes sense for lenders, but still, will they prefer someone who pays off the loan early or someone who pays more interest by missing a few payments in between?

OMEGA44-XT said:

will they prefer someone who pays off the loan early or someone who pays more interest by missing a few payments in between?

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Missing few payments : Really bad
On time monthly payments with interest: Good
Early foreclosure: Bad

OMEGA44-XT said:

I don't know how exactly CIBIL works, but for checking if someone can be given a new credit, that person paying off credit early should not be seen as a negative, again just my opinion. Your point makes sense for lenders, but still, will they prefer someone who pays off the loan early or someone who pays more interest by missing a few payments in between?

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They would prefer that you keep paying the loan for as long as possible with interest. If you miss payments and still pay it back with even more interest, then they would like it even more. Banks actually hate prepayments because it puts a cost on them and hence why many put foreclosure charges.

Credit score is for lenders more than borrowers, so they are always stilted towards what is better for lenders.

t3chg33k said:

the foreclosures do have a negative impact on the credit score, so it is not something you should be doing regularly.

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Nope, closing credit card EMIs early actually has a positive impact by freeing up the available credit and bringing down the utilization %

Credit card EMI is not a loan, you're just using the credit limit which is already given to you. In fact the credit bureaus won't even get that information, all they get is your bill amount, credit limit and payment history. So buying in/closing credit card EMI doesn't affect your credit score.

napstersquest said:

Early foreclosure: Bad

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If it's credit card EMI then no it's the opposite.

If it's a loan then it could be bad *iff* you don't have any other active lines of credit otherwise even closing normal loan is also good for credit score. In fact when you apply for loans most banks will ask you to prepay and foreclose the existing loans.

If by foreclosure you mean defaulting on payments and bank foreclosing the loan then yeah it's really bad.

jinx said:

That seems about right. 78k for 3080ti + 36k for 5950x - 8k no cost EMI discount = 106k

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That 8k upfront discount is actually interest that will be charged plus some GST on this 8k so in total it would be 106+8+approx 18% GST on interest ard 115-116k in total with EMIs.
He would have received an email with details on this and would be able to confirm the final amount after EMIs.

nishthecooldude said:

That 8k upfront discount is actually interest that will be charged plus some GST on this 8k so in total it would be 106+8+approx 18% GST on interest ard 115-116k in total with EMIs.
He would have received an email with details on this and would be able to confirm the final amount after EMIs.

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He got the EMI cancelled without any extra charges. ICICI will probably patch this loophole soon.

Vaastav said:

Update :- I received message From my Friend and He Told me that ICICI doesn't Charges anything If EMI is Foreclosed and You just have to call To cancel the EMI by calling their Phone Banking. So I went ahead with it and to my Surprise I wasn't Charged Anything Moreover The Processing Charges Were also Refunded.

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