When you buy a product on Equated Monthly Instalments (EMI) it takes away the burden of paying a huge amount upfront. However, one should remember that there is always a hidden cost associated with No Cost EMI options. Therefore, it is important to understand the cost associated with No Cost EMI & Zero Cost EMI options.

The bank will continue to charge interest on EMI as per existing rates. However, the interest to be charged by the bank will be passed on to you as an upfront discount at the time of your purchase, effectively giving you the benefit of a No Cost EMI.

This discount excludes GST on the interest amount that will be charged by your bank.

For Example: Let's say you get a subscription at Rs 27,000 after a 10% discount.

Normal EMI - The amount that you will pay for the subscription will be inclusive of the interest charged by the bank. For example, you will be paying Rs 29,244 for 12 months (including the % interest p.a; 15% in this case).

No Cost EMI - The total cost of a subscription for 12 months at 15% would be the same (Rs 29,244).

However, since it is No Cost EMI we would be providing you with an upfront discount and charge you only Rs 27,000 instead of Rs 29,244. Hence, you receive a benefit of Rs 2,244 in terms of upfront cost.

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What is No Cost EMI?

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