Looking For No-Cost EMI Option: Here Are The Advantages And Disadvantages?

Subscribe to GoodReturns
For Quick Alerts
For Daily Alerts

    Unlike the previous zero percent EMI which was ruled out by the RBI as loans cannot be extended without interest on it. The new no-cost EMI charges interest but the same is adjusted from the sale price of the product. What this means is consumer does not have to pay over and above the sale price of the bought good. More, so oit's a subvention offered to consumers by manufacturer or seller.

    Looking For No-Cost EMI Option: Here Are The Advantages And Disadvantages?

    Let us understand how your interest component is adjusted on the product cost you purchase

    Suppose you buy a TV for as much as Rs. 25000 and the retailer offers you a discount of upto Rs. 2000 as no-cost EMI waiver then after paying the discounted price for it, the discount is adjusted by the interest payment which is debited from your bank account.

    Usually, no-cost EMI offers discount in the range of 12-15% which depends on the tenure as well as product, seller as well as loan financier.

    Some Disadvantages Of No-Cost EMIs

    Not all financiers extend this loan.

    If it extends no-cost EMI then it can well be the case that the offering is made only to institution's existing customers.

    Generally such a deal is only available on a credit card and in case the same loan offering is availed through an offline route then processing charges also apply.

    Also, in line with the loan offer, some of the NBFC company offer EMI card which is provided only to customers who have a credit score over some value.

    The no-cost EMI is not available for all product types or brands, so the financing with some additional charges , may not be an option in all case.


    Story first published: Monday, October 16, 2017, 11:22 [IST]
    Company Search
    Enter the first few characters of the company's name or the NSE symbol or BSE code and click 'Go'

    Find IFSC

    We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Goodreturns sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Goodreturns website. However, you can change your cookie settings at any time. Learn more