Image Source : FREEPIK What is the no-cost EMI scheme? Learn how it functions and if it is useful or not
No-cost EMI is the ability to pay for a purchase gradually and without any interest. Although this can first seem attractive, there is a cost involved. This cost often appears as a discount on the items or services in question that you would have otherwise received.
Credit cards may be helpful when making significant expenditures. You may easily buy expensive products using the EMI options offered by many credit cards. Some banks give credit cards with no-cost EMIs. Customers who use free EMI credit cards may purchase gadgets without worrying about a down payment, processing fee, etc.
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What is a No-cost EMI?
If you want to buy a refrigerator, television, or washing machine but do not want to pay the full amount at once, no-cost EMI could seem like a good option. Vendors collaborate with banks and non-banking financial institutions (NBFCs) to provide clients with free EMIs.
How does EMI with no costs operate?
If you choose the no-cost EMI option, the vendor would eliminate the discount on the product and would have to pay the full price. A person will have to pay Rs 1,000 per month if they choose a 12-month EMI period and spend Rs 10,000 on a product. Interest and processing charges together total Rs 0 (zero rupees). The consumer is required to pay a total of Rs 10,000 as a consequence.
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What are the benefits and drawbacks that come with the No-cost EMI option?
Benefits: It makes it possible to live better by letting you pay for expensive products in monthly installments.
Cons: The price for customers in no-cost EMI might be far more than it would have been if they had been bought with cash. Customers may be enticed to make dangerous impulsive purchases via free EMIs.
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