In a fast-paced world, consumers want to make smarter purchases without paying hefty prices in one go to brands. No-cost EMI schemes have emerged as a lucrative choice for those who crave versatility in monetary transactions and wish to shop within their desired budgets. There are many ways to save on consumer spending, and these schemes provide financial relief, helping businesses deal with market volatility while satisfying consumers.

In this guide, we delve into the basics of everything you need to know about No-cost EMIs. We also discuss how to make purchases on EMI with zero interest and the pitfalls to watch out for when choosing these schemes.

How Does No-cost EMI Work?

No-cost EMI is a financing option that allows you to repay your dues in monthly instalments without incurring any interest or additional finance charges. Many offline and online stores accept No Cost EMI cards.

When you purchase a product via the No-cost EMI method, the retailers price the product higher. You may also have to let go of the discounted price or any other offer when paying via this mode. So, there are hidden costs involved, and you may not be able to purchase a product at its discounted price.

For example:

Original Price of a product: ₹10,000

No-Cost EMI: You might see it priced at ₹12,750 with a tempting “No Cost EMI for 12 Months!” offer.

Benefits of No Cost EMI

The following are the benefits of choosing No-cost EMI schemes for consumers:

1. With No-cost EMI schemes, no down payments are needed, and these EMI schemes bear zero additional costs or interest fees. However, there are hidden costs involved.

2. The festive season is the best time to opt for No-cost EMI offers because that’s when shoppers buy in bulk. It’s a great option for those who want to shop within a budget.

3. No-cost EMI plans are eligible under exchange offers, too.

4. Borrowers can get instant approvals on consumer durables and smart purchases using them.

5. Additionally, you do not have to pay any processing fees, and EMIs are a convenient way to make high-ticket purchases for products such as furnishings, electronic gadgets, household appliances, etc.

Eligibility Criteria for No Cost EMI

The eligibility criteria for applying for No-cost EMIs are as follows:

1. You must be a citizen of India.

2. The age limit is between 21 and 60 years.

3. Monthly income should be more than ₹10,000.

What to Look for When Availing No-cost EMIs?

It is important to look out for certain factors before availing yourself of No-cost EMIs. These include the following:

1. Check the duration for which the lender offers interest-free repayments. This may impact the overall cost of the purchase, and some lenders are known to have restrictions on interest-free periods.

2. Evaluate if the product you want to purchase offers no-cost EMIs. Some offers are limited to specific items, and your item may not be eligible for purchase on EMI.

3. No-cost EMIs can be a huge financial commitment, depending on the repayment tenure. Check if it is within your financial capacity and whether or not it will affect your credit score.

4. Check if no-cost EMI schemes allow prepayment flexibility. This will allow you to clear your debt ahead of time and avoid incurring penalties later on.

5. Assess your monthly budget and evaluate if you can afford to pay for these EMI payments. Failing to do so can result in missed payments, which can negatively impact your financial profile. A poor CIBIL score due to missed payments or delays can affect your chances of applying for other loans in the future.

6. Ask the lender whether they offer a fixed or flexible repayment date. Most lenders set a fixed date for repayments and ask borrowers to choose the auto-debit facility to make timely repayments every month.

So, when using No-cost EMIs to buy products, remember to consider hidden costs, compare various offers, and then choose the most suitable option. Only by making an informed decision can you benefit from this financing option.

Conclusion

Most banks, financial institutions, and NBFCs offer no-cost EMIs for online and offline purchases. The good news is that you pay nothing other than the purchase price and enjoy a flexible EMI repayment tenure from anywhere. The documentation needed is hassle-free, and these EMIs don’t burn a hole in your pocket.

The more you repay on time, you may enjoy extra benefits such as winning loyalty reward points or getting additional discounts from brands on a wide range of products. You can shop to your heart’s content and not worry about facing any financial constraints. It’s crucial to select a no-cost EMI plan that works for you before making a purchase because you cannot change a plan after choosing one for the product purchase.