gadget or electronic Purchasing equipment has never been as easy as it is today. The biggest reason for this is the option of no-cost EMI (Equated Monthly Installment) provided by e-commerce or retail shops in easy installments. At present, many companies give the option of no-cost EMI to the customers to increase their sales. Under this, on the purchase of items like TV, Fridge, AC, there is an option to pay the money by dividing it into small EMIs instead of a lump sum.
No-cost EMI has emerged as a popular and attractive option for consumers. As the name suggests, these paid plans are available without any extra charges. However, this does not happen in reality. There are several catches in no-cost EMI, which are important to know.
hidden charge
‘No-cost’ EMIs include hidden charges such as processing fees, down payment amount and other administrative charges. Therefore one must read the terms and conditions carefully before opting for ‘no-cost’ EMI from any bank or NBFC.
Applicable on select products only
No-cost EMI is generally applicable on select products. No-cost EMI options are easily available for electronics, gadgets and high-value items. This EMI is not available on all types of purchases.
Tie up with financial institutions
Retailers offering no-cost EMI often collaborate with financial institutions to provide this service. EMI terms, including tenure and eligibility criteria, may vary depending on the partnership between the retailer and the financing institution.
impact on credit score
Opting for no-cost EMI can affect your credit score. If you are not able to pay EMI on time, your credit score may get damaged.
down payment
No-cost EMIs are interest free, but may require down payment.
obligation to repay
In no-cost EMIs, the repayment period is pre-fixed, which limits the flexibility for consumers to choose the repayment period.
explore other options
Explore other options before choosing no-cost EMI. Purchasing through bank loan or credit card can reduce the total cost. Some retailers may offer no-cost EMI along with discounts or cashback offers. However, it is important to understand the catch between these incentives and EMI terms, as some discounts may depend on specific payment methods.
Latest Business News