How to buy the best products online with no-cost EMI?

Buying expensive items becomes easy when you leverage the power of EMI. This articles explains everything you need to know about no-cost EMI schemes and the products you can consider buying.

How to buy the best products online with no-cost EMI?

The e-commerce market has leapfrogged in India and the trend is expected to continue owing to the impact of the pandemic on travel and movement. An ever-increasing number of physical stores too are adopting digital avenues. In addition to offering a convenient shopping experience, the availability of no-cost EMI or zero interest EMI schemes has tremendously buoyed buying behaviour.

The no-cost EMI feature is not just restricted to large e-commerce aggregators like Amazon and Flipkart. Various white goods brands, jewellery and furniture stores, as well as small online retailers offer no-cost EMI plans to push sales and remain competitive. This easy finance scheme has made it possible for consumers to instantly purchase big-ticket items that would otherwise be unaffordable or too strenuous on the pocket. 

How does no-cost EMI work?

In principle, a no-cost EMI allows you to pay for a product or service in affordable monthly instalments at no additional interest cost. If, for example, you purchased a mobile phone costing Rs 18,000 for a 3-month tenure no-cost EMI, you will have to pay Rs 6000 every month for the next 3 months to service the loan.

However, a circular released by the Reserve Bank of India (RBI) in 2013 specified that banks cannot offer interest-free loans. So how do retailers and e-commerce websites continue to offer this scheme? There are two ways in which the interest cost (however small) is bundled with the price of the product/ service. 

Related: Know your EMI's in-and-out. Are you paying more than you should?

Option 1: The customer forfeits an upfront discount and pays full price of the item which includes the interest component. 
Example: Buy-now price for mobile handset at a discounted Rs 15,000 or no-cost EMI at retail price of Rs 18,000.

Option 2: The listed price has the interest cost bundled in.
Example: product price Rs 15,000 + fees, charges and tax at 10% of product price (Rs 1500) = Display price Rs 16,500.

In most cases, merchants go for the first option, absorb the interest cost of the EMI, and pass on the same to the customer as a discount.

Should you opt for a no-cost EMI?

As mentioned, no-cost EMI options work well for purchasing high-value products by letting you break the payment into pocket-friendly instalments. Opting for small loan EMIs also helps build your creditworthiness. 

It also enables you to get immediate access to a product or service without having to worry about paying for it upfront. This can be a huge advantage in case of emergencies. Imagine a scenario where a household appliance like your microwave breaks down, or you lose a smartphone, or your laptop gets damaged beyond repair. 

With this option you can purchase a replacement instantly and have it delivered in just a few days, while you decide on a convenient tenure to make the repayment of your no-cost EMI phone, microwave, or no-cost EMI laptop.

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How to avail of no-cost EMI?

Search for your required product or service either through the direct retailer’s website or an e-commerce platform. Compare prices (if available) across multiple platforms and evaluate purchase option after considering, trustworthiness, delivery timelines, warranty, and after sales service (if applicable).

Look for the no-cost EMI tab close to the list price or ‘add to cart’ button. While some EMI options may be offered through any debit or credit card, others may have an eligibility for only specified bank customers. If there are multiple bank/NBFC options listed, you will be given a breakdown of the applicable EMI for various tenures starting from 3, 6, 9 months etc. as well as processing fee, if there’s any.

What products can you get with a no-cost EMI?

The list of products now available at an easy instalment system is virtually endless. Here is a non-exhaustive list of some popular items that are readily available with the scheme.

  • Smartphone/ tablet
  • Laptop/ computing device
  • Home theatre system/ Audio system
  • Microwave/ washing machine/ kitchenware/ mixer-grinders, etc.
  • TV/ air-conditioners/ lights/ other electrical fixtures
  • Bed/ mattress/ dining table/ chairs/ cabinets, etc.
  • Gold coins/ gold and precious jewellery
  • Branded clothes/ bags
  • Perfumes/ watches/ grooming products

Also read: 5 Things to remember when opting for big festive discounts online

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