Home Business No-cost EMI (monthly installments): Does it really come at zero cost?

No-cost EMI (monthly installments): Does it really come at zero cost?

No-cost EMI: What you need to know before making a purchase using this plan

During the festive season, many companies and online retailers come up with attractive offers, including no-cost Equated Monthly Installment (EMI) schemes.

Many people often wait for the festive season sales to buy home appliances, new vehicles, bikes and gadgets.

No-cost EMI offer allows consumers to buy various products in installments without paying additional interest or charges.

The no-cost EMI scheme has been widely availed by many people for owning a new gadget or home appliance. However, before making a purchase, you should be aware of some aspects of the plan.

When you choose the no-cost EMI or zero-cost EMI option to make a purchase, it means that you will pay the monthly installments for that product, but without any interest or charges. This means that you will only pay the actual price of the product divided into EMIs.

Many banks offer no-cost EMI facility in different options. Some lenders also offer zero-down payment plans on certain products where you are not required to pay any amount upfront and can easily make monthly installments.

On the other hand, some banks require a minimum amount as a down payment, and the balance amount has to be paid in EMIs.

While going for no-cost EMI, you can choose different repayment tenure as per your requirement. This can be anywhere from 3 months to 24 months.

Now, if this plan sounds like the perfect fit for your next purchase, there are a few things you should be aware of.

While there is no interest on the principal amount in a no-cost EMI, it does not mean that you will only pay the actual cost of the product.

Many lenders charge a processing fee for no-cost EMIs. This allows the bank to charge interest as a processing fee.

Also, while opting for no-cost EMI, you do not get the discount offered on the product that you could have availed otherwise.

Hence, it is better to analyze these factors and only then go for the no-cost EMI. It is always advisable to read the terms and conditions before deciding to avail the no-cost EMI scheme.

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