A no-cost EMI is a loan option that enables you to repay the principal amount and interest in EMIs. Unlike traditional loans, however, no-cost EMI has zero processing fee and other charges – essentially making it more cost-effective to borrow. Furthermore, with a no-cost EMI, the total cost of interest is built into the EMI amount. This allows borrowers to better plan their finances as they will be aware of the exact amount that they need to pay as an EMI each month.
No Cost EMI, on the other hand, allows you to purchase products and pay the cost in monthly installments without having to bear an extra interest cost. Our no-cost EMI option for credit card users has made buying easy and convenient. No interest charges are payable by you towards the specified credit period if it’s between 6 months and 5 years. The cost of the product is emolument-free. This means that you only need to clean the product’s listed price through your chosen number of EMIs.
But what if you had the choice to pay for this television over 11 months instead? Under a no-cost EMI plan, there is no interest cost at all! In this case, you would have only to repay the total cost of Rs. 48,000 in 11 months, inclusive of the principal amount, which is the same in both cases.
You can use a no-cost EMI plan to purchase this device very easily. This means that you will not have to pay any interest on your credit card, as the EMI will be financed by the store itself. However, don’t forget that the EMI payable for no-cost EMIs is roughly Rs. 4,000 more than what you would usually pay for a standard EMI.
No-cost EMI schemes are a boon for consumers with limited credibility. It allows people to purchase products at a low monthly cost through its partner financial institutions which charge no interest on the purchase. The customer is also allowed to choose their EMI tenure and can pay off the dues in easy EMIs.
Customers often confuse a ‘no cost’ EMI with zero cost. However, even under a ‘no cost’ EMI plan, customers do end up servicing a cost. Due to a lack of information and awareness, they are often unaware of the underlying factors. Retailers or resellers provide ‘no fee’ facilities under two packages –
Let’s use the same TV as an example. Say you pay for the TV by buying it outright. This is a discounted price because most retailers will drop the price by about 4,000 to help make the deal sweeter. If you decide to opt for a no-cost EMI plan, you pay the full Rs. 48,000 up front and then spread this cost over a period of three years. By not getting the retail discount, your interest rate is higher and you are paying more in total.
With no-cost EMI options by Pinelabs, you can make your big purchases without worrying about committing to cash in advance. No-cost EMI schemes allow you to finance a product using EMIs for up to 12 months. Some of these plans may even help you earn an interest rate as high as 6%. You can now choose to buy any product over ₹ 1 Lakh via no-cost EMI.
