Festive Season Deals Are Live: Are No-Cost EMIs Really A Good Deal?

Festive sales by retailers like Amazon and Flipkart are once again in the news for their big discounts and flashy deals. These platforms have partnered with several banks to offer deals like instant discounts and no-cost EMIs. While these seem attractive, it is important to understand how they work.

On the surface, no-cost EMIs seem like an affordable option to buy a product without burning a hole in one’s pocket. However, sometimes these offers can have hidden processing fees that you may be unaware of.

Zero-interest EMIs are a popular marketing strategy that lets buyers afford expensive items like phones, appliances, and furniture more easily. Common during festive seasons, these schemes boost sales. 

Regular EMIs include interest, making the total purchase cost higher. On the other hand, zero-interest EMIs seem more appealing, but they may include hidden charges or reduced discounts.

A no-cost EMI card offers a fixed credit limit, letting you pay for purchases in monthly installments. While it appears interest-free, many sellers inflate the product price to cover the interest, creating a false impression of zero cost for the buyers.

In 2013, the RBI clarified that such schemes are not truly interest-free as the cost is often built into the price. Additional charges like processing fees and GST on the interest may also apply. 

Moreover, upfront buyers often receive discounts that are not available with EMI purchases. As a result, you could end up paying more with a no-cost EMI than by paying in full.

To avoid hidden charges, it is always recommended to compare product prices across multiple websites and stores. This helps you identify sellers offering real discounts and ensures you get the best deal overall.

Before opting for a no-interest EMI, carefully read the terms and conditions. Check the payment duration, processing fees and charges for early repayment. This way you can pick the best option and avoid unexpected costs or financial surprises.