Festive sales are a popular time for Indians to shop for everything from smartphones to refrigerators and furniture. E-commerce platforms such as Amazon, Flipkart and Myntra roll out deals and discounts, giving shoppers an opportunity to make big purchases at lower prices.
Among the offers promoted during these sales, no-cost EMI has become an attractive option for people buyers who do not want to pay the full amount at once. The offer allows them to pay in instalments, but the name can be misleading. Depending on the deal, buyers may lose an upfront discount or have to pay additional charges.
How Does No-Cost EMI Work?
With a regular EMI, buyers repay the borrowed amount along with interest. In a no-cost EMI scheme, the interest is usually adjusted through a discount on the product or included in its price. This makes the monthly payments appear interest-free.
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According to credit bureau CRIF High Mark, one common arrangement involves the buyer giving up an upfront discount, with the amount effectively covering the interest payable to the bank or financial institution. The interest cost may already be included in the product's price.
For example, a washing machine priced at Rs 40,000 may be available for Rs 36,000 with a total payment. Customers opting for no-cost EMI may have to forget the Rs 4,000 discount and pay the full price in instalments.
In another example, a laptop listed at Rs 50,000 may cost Rs 55,000 under an EMI plan if the interest amount is added to the product price. Buyers should compare the total amount payable before choosing a no-cost EMI offer.
Why Do Shoppers Prefer No-Cost EMI?
Paying for a product in instalments can be useful when the full price is difficult to pay at once. During the festive season, when households may have several expenses, smaller monthly payments can help buyers plan their spending.
The option is also promoted across e-commerce platforms and retail stores, allowing customers to consider products that might be beyond their current budget. But smaller monthly instalments do not automatically mean a better deal. Buyers should compare the EMI price with the upfront payment price before making a decision.
Is No-Cost EMI Worth Choosing During Festive Sales?
The decision depends on the buyer's budget and the terms of the offer. If someone can comfortably pay the full amount and receive a substantial discount, paying in full may work out cheaper because it avoids EMI-related fees and the loss of savings. But for buyers who want to spread the cost of an expensive purchase over several months, a no-cost EMI may allow them to pay in smaller monthly instalments that fit their budget.
Before making a decision, compare the price with the total EMI amount, check for processing fees and taxes, and read the terms relating to missed payments. A no-cost EMI can make festive shopping easier to manage, but understanding the actual cost is also important.
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