Have you ever noticed that banks offer higher discounts on EMI transactions than outright purchases? Many people are surprised when they realize this and wonder why it’s happening. If you’re one of them, you’re in luck! In this blog post, we’ll look at three reasons banks offer higher discounts on EMI transactions than outright purchases. We’ll also explain an EMI and how to use an EMI calculator to decide which option works best for you. So, let’s get started!
1) To Attract More Customers
When banks offer discounts on EMI transactions, they are trying to attract more customers. Banks can incentivize customers to make large purchases and spread out payments over several months by offering discounts. That allows them to gain more customers, especially those who may need more upfront funds to purchase outright. The EMI option also allows customers to make more expensive purchases than they otherwise would be able to afford. This encourages customers to buy from the bank instead of their competitors, as the bank is seen as offering a better deal. Therefore, by providing discounts on EMI transactions, banks are able to increase their customer base and increase their profits.
2) To Increase Loan Repayment
One of the reasons why banks offer higher discounts on EMI transactions than outright purchases is to boost sales. Banks are aware that customers are more likely to make a purchase if they can pay for it over time in installments, as it allows them to spread out the cost. By offering higher discounts on EMI transactions, banks can encourage customers to purchase more expensive items that they may not have been able to afford all at once. Furthermore, they can also entice customers to upgrade their products and services, since the discount will reduce the total cost.
In addition, banks may also offer discounts on EMI transactions in order to incentivize customers to purchase products or services from them instead of their competitors. By offering a larger discount than their competitors, they can draw customers away from other providers and increase their own sales.
Overall, offering higher discounts on EMI transactions can be a great way for banks to boost their sales. By making it easier for customers to pay for items over time and providing incentives such as larger discounts, banks can encourage customers to make more purchases and increase their revenue.
3) To Boost Sales
When banks offer higher discounts on EMI transactions than outright purchases, they also encourage customers to opt for a loan or EMI option. This increases the chance of loan repayment as customers are more likely to make regular payments when they have already invested in the product.
Banks understand that loan repayments can be difficult to keep up with, especially if customers are in a poor financial situation. This is why they offer attractive discounts on EMI transactions to encourage customers to take out loans instead of making an outright purchase. By providing discounted EMIs, banks can entice more customers to take out a loan and increase their chances of loan repayment.
The higher discounts on EMI transactions also make it easier for customers to commit to the purchase, as they receive a reduced amount to pay off compared to an outright purchase. This also helps increase loan repayments as customers are more likely to make regular payments with lower amounts.
Banks understand the importance of loan repayments and are always looking for ways to encourage customers to take out loans and make timely repayments. Offering higher discounts on EMI transactions than outright purchases is one way that banks can do this, and it has proven to be successful in the past.
Also Read : An In-Depth Understanding of EMI in Arrears vs EMI in Advance