I have been earning for 5 to 6 years. In that time I have never taken a loan, not even an education loan. I have never owned a credit card, and I still use my father's i20.
So, should you buy things on EMI? For the things you want, like a phone, a bike or a holiday, my answer is no. Save first and buy once the money is there. A loan makes sense only in a few cases: when it builds a business, buys a home or land, or covers a short cash gap you could repay at once.
(My book, Quit 9to5, comes out in January 2027. Join the Quit 9to5 waitlist to hear when it's out.)
What does an EMI really cost you?
An EMI costs you a piece of every future salary, decided today.
EMI stands for equated monthly instalment. You get the phone now, and the bank takes a fixed amount from your account every month until it's paid off. The interest is the visible cost. The bigger cost is that this amount has to be paid whether you love your job, hate it, or lose it.
That makes an EMI the one expense you can't cut. You can cook at home and skip a weekend trip when money is tight. The instalment stays. So every EMI quietly raises the minimum salary you need to survive, and it shortens the time you could live without one. I explained that time, your runway, in How Much Savings Do You Need Before Quitting Your Job?
If an EMI costs this much, why does almost everyone have one?
Why does everyone around you buy on EMI?
Because the monthly number feels small, and everyone else is doing it.
A ₹90,000 phone feels expensive. "Only ₹7,500 a month" does not. The EMI breaks the price into pieces small enough that you stop asking whether you need the thing at all.
It also feels normal. Almost everyone around me has a credit card. When they find out I don't, they're shocked. Some have called me stupid for it. I have my reasons, and the biggest one is the next point.
An EMI lets you buy at the exact moment the urge is strongest. I've noticed that when I delay a purchase, especially a small one, the urge often fades. A few weeks later, the thing doesn't look that interesting. An EMI removes those weeks. You pay for the urge before it has a chance to pass.
Add a yearly hike to this, and the pattern repeats. Each raise funds a new instalment, which is how your salary hike disappears every year.
So is every loan a mistake? No. Where you draw the line matters.
When does taking a loan make sense?
A loan makes sense when it buys something that earns, something that grows, or something you need to live.
Here is the test I use. Before you borrow, ask what the money is buying:
An earning asset. In business, debt is useful when capital is the only thing holding you back and the money will earn more than the interest you pay.
A survival need or a growing asset. A home you live in is a survival need. Land usually gains value. Borrowing for these is fine.
A short cash gap. Say you own assets worth ₹1 crore and want a ₹10 lakh car, but your cash is locked up. A loan is acceptable here only if you could repay all of it in one go whenever you need to.
A want. Everything else: a pricier car, a new phone, a holiday. Here debt is useless. An expensive car loses value from the day you drive it out, while the loan keeps running at full size.
I believe debt is a trap, especially when it is used to fulfil desires and ego.
Most EMIs people sign fall in that last group. For those, I use a different system.
What do I do instead of an EMI?
I save for the thing first and buy it in one shot. I call this a reverse EMI.
The idea is in my savings post: pick the price, divide it into monthly amounts, and set that money aside separately until the full amount is ready. In 2025, for example, I set up a ₹15,000 monthly RD for 12 months to save for a new laptop and phone. I never ended up buying them. The old phone and laptop still do the job.
Saving first gives me back the time an EMI takes away. It makes every purchase a conscious decision, and it gives the urge time to fade. When I still want the thing at the end, I buy it feeling proud instead of guilty, and no bill follows me.
My life looks like this because of it:
In 5 to 6 years of earning, I have never bought a vehicle. I use my father's i20.
My phone and laptop are about 5 years old.
I took a foreign trip only after I had saved a lot, and it was a budget trip after I got married.
If you want the frameworks behind this way of thinking, join the waitlist for Quit 9to5.
That works for new purchases. But many readers already have instalments running.
What if you already have EMIs?
Then stop adding new ones, save aggressively, and finish the existing ones as soon as you can.
Each loan you close frees its monthly amount. Once a loan ends, keep paying the same amount every month, but into your own savings. Your budget already works without that money, so you won't miss it.
If you're thinking about leaving your job, clearing your EMIs comes before handing in your resignation. I covered the full check in Should You Quit Your Job Without Another Offer?
What does having no debt give you?
It gives you the right to say no.
With nothing owed, my monthly needs are small and fully mine to control. That is a big part of why I could quit my job in 2023 and build a career on my own terms. Nobody had a claim on my next salary, so I could afford to walk away from it.
Thought exercise: List every EMI you pay today. Next to each, write what it bought: an earning asset, a need, or a want. Add up the "want" EMIs and multiply by the months left on each. That number is how much of your future salary is already spent on things you wanted once.
Want to own your next salary?
I've put everything I know into first-principles frameworks in Quit 9to5, my book coming out in January 2027: how to build your runway and walk out of salaried work when you choose.
Join the Quit 9to5 waitlist so you don't miss the launch.