The Dos and Don'ts of Using Shopping Loans Responsibly

May 21, 2024
 |  1 min read


The current market of instant loans is the main reason for impulse shopping and overspending. It is vital to buy products after evaluating the financial impacts debt has loan for shopping. This means there should be complete mastery of how urgent loan online works. Let us discuss in detail about shopping loans; what are shopping loans and how do they work and why should you use shopping loans responsibly.

What are Shopping Loans, and How Do They Work? 

Shopping loans, or precisely, retail installment contracts (RICs) are a form of credit that merchants give to their customers that may serve as financing to buy products or services. Unlike conventional loans, these loans are usually unsecured, which means they do not need collateral.

On the other hand, the lender does not judge the creditworthiness and interest rates of a borrower. The borrower commits themself to repay the loan principal, along with the applicable interests, within a specific time duration, often in the form of uniform monthly instalments. 

When is the Right Time to Use a Shopping Loan?

After understanding the meaning of shopping loans, let us now discuss the times for “when is the right time to use a shopping loan? Given below are a few situations:

  • Emergency Purchases: The shopping loans could help in your financial plan when emergencies come, and you have to make unexpected and critical repairs or medical bill payments. They become the most convenient source of sudden and important shopping help. 
  • Planned Purchases with Limited Budget: For the things that you plan to buy, for example, furniture or appliances, where the upfront cost is more than your current budget, a shopping loan can help you spread the payment over time.  

Why Should You Use Shopping Loans Responsibly? 

It is important to use shopping loans responsibly due to the following reasons:

  • High-Interest Rates: One of the most significant disadvantages of urgent loan online is the high interest rates that they usually have. When you do not pay your loan back in time, the interest charged amount gets increased whereby the overall cost of this purchase will drastically increase.
  • Debt Trap Risk: Allowing one to obtain multiple shopping loans with no specific plan of how to repay them is a possible way to get deeper into debt. Instead of it being an easy way to overspend on things you cannot afford to pay back, it is actually a way of making your financial position worse in the future. 
  • Impact on Credit Score: Being late with your shopping loan or making any repayment late will affect your credit score, so it will be difficult for you to get a good credit line or a mortgage in the future. 

Dos and Don'ts of Using Shopping Loans Responsibly

The rules to follow and what you shouldn't do when using a loan for shopping. 


  • Do Compare Offers: Check for competitive interest rate and the flexible repayment period that agree with your financial situation.
  • Do Budget Wisely: Consider the total amount of the loan and ensure that it does not disturb your monthly budget. 


  • Don't Borrow Impulsively: Avoid buying what you don't need rather use your credit for necessities. 
  • Don't Ignore Repayment Obligations: Automate or make auto-due date reminders to prevent being penalised for late payments. 


Shopping loans can be a good way to intervene in the balance of finances and to help people buy what is crucial for them but which they cannot afford at the moment. They can be as dangerous as other forms of credit if misused. In this article, you can learn the dos and don'ts of shopping loans, which in turn will help you to get the benefits of shopping loans while at the same time protecting your financial well-being. Remember that if you want to have a solid financial background and achieve your long-term goals, you must strive for fiscal discipline. Get in touch with mPokket experts or mPokket app for shopping loans and quick short term loans.

Gaurav Jalan

Gaurav Jalan is the Founder and CEO of mPokket, a digital lending platform serving underserved Indian youth. He leverages technology and experience to deliver cost-effective credit to marginalized populations. In his role, he provides strategic direction and oversees execution to fulfill mPokket's mission.