- Date : 11/10/2022
- Read: 4 mins
What is no-cost EMI, and should you opt for it? You might be able to buy that high-value item that you have your eyes on, after all.
You might have been in a situation when you wanted to buy a new phone. Or you might want to upgrade that washing machine. We all have experienced it, checking the different features, watching unboxings, and scrolling. We see how expensive it can be, and we might not be in a situation to pay for the product in full. In comes the no-cost EMI to help us purchase our desired products. EMIs were already convenient for us, even though we had to pay interest. However, the no-cost EMI has improved shopping as you don't have to pay interest on your EMIs and can buy your desired high-value products. You might have to pay the processing fee in some cases, though.
The festive season brings great joy, and shoppers get ready to buy their most desired things. One offer that sellers provide you to make buying more convenient is the no-cost EMI. It is a repayment option, and we offer valuable insights into how you can use them and what it is about. It would help if you understood this before availing of this option during this festive season.
What is No-Cost EMI?
No-Cost EMI is also called zero-interest EMI and is a form of repayment scheme. It lets you distribute your purchase's cost into installments that attract no interest for up to a year. This repayment scheme is beneficial when you buy high-value things, and paying the total price upfront can be challenging. With this repayment option, you can purchase your desired items without burning a hole in your pocket. Let's see how it works. For example, you buy a mobile worth Rs. 60,000 and can't pay this high upfront. You can opt for a no-cost EMI, and you will have to pay Rs. 5,000 every month for one year instead of shelling out Rs. 60,000 in one go. It makes buying much more affordable.
Is no-cost EMI cost-free?
The primary benefit of a zero-interest EMI is that you do not have to pay interest on the EMI. The seller provides it as a discount and bears the interest payable. However, there are other conditions and costs associated with EMIs. Sometimes sellers offer high discounts in the case of upfront payment. However, with zero interest EMI, the seller might not provide such discounts. Sometimes the seller waives off the payable interest in the form of discounts but charges a 2-3% processing fee. You will also have to pay 18% GST on the product. For example, a washing machine costs Rs. 20,000, and the seller provides a 10% upfront discount. It would mean you get Rs. 2000 off if you pay upfront. However, if you choose the zero-interest EMI option, you might have to let go of this discount and pay the entire Rs. 20,000 in 12 months. You would also have to pay 18% GST.
Also Read: Know your EMIs inside and out.
Should you Go For Zero-Interest EMI?
You can opt for zero-interest EMIs during the festive season. You must consider two factors to decide whether you want to go for it or not. The two factors are your financial condition and the product's price. If you are in a situation where you can pay the total amount upfront, then you must go for it. You might get the benefit of high discounts. However, taking an additional loan might strain you if you already owe money to lenders.
Zero-interest EMI has opened a whole new door for buyers. Using the no-cost EMI option, you can now purchase your high-value desired items without burning a hole in your pocket. It is a win-win for both the buyer and seller. On the one hand, the buyer gets their desired product, and on the other hand, the seller makes their sale.