Is ‘No-Cost EMI’ really free? Know the ‘secret’ that companies hide from you

Whether it is festive season or an online sale, whenever we make up the mind to buy any expensive items, such as a new phone, fridge or TV, a ‘magical’ word draws us towards us – “No-cost EMI” That is, ‘installments without interest’.

How good does it feel to hear, right? That you buy a phone of 50,000 today and just keep paying a little amount for the next 6 months without any extra interest. It seems as if the company is taking care of our pocket!

But wait! Is it really as straightforward and free as it looks? Or is there any other game going on behind the screen of this ‘zero interest’?

Then what is the game?

The truth is that nothing is found free in the world. ‘No-Cost EMI’ is also not free. It is just a very clever business model. Interest is charged from you only, just the way is slightly twisted.

How does this ‘magic’ work?

Take a small example to understand this game.

Suppose, you want to buy a smartphone, the price of which ₹ 30,000 Is.

• If you give all the money together (cash/card payment): So the shopkeeper may give you some discounts, maybe the same phone ₹ 27,000 Will give in (Ie you ₹ 3,000 Got a direct discount of).
• Now come on ‘No-cost EMI’: When you take this phone on no-cost EMI, you ₹ 30,000 It is only to Suppose there is 6 months EMI, so your installment will be ₹ 5,000 per month.

So where was the loss?
He was damaged ₹ 3,000 Of discount, which you were getting on payment together.

Actually it happens that the bank takes interest from you, but that interest amount is already filled by the company or shopkeeper as a discount. That is, the discount that should have come in your pocket, went to pay your EMI interest. So technically, you gave interest, just you did not know.

Second way: processing fees
Sometimes some companies a non-refundable with NO-Cost EMI ‘Processing fees’ She applies This fee is nothing but another name for interest.

So is ‘no-cost EMI’ always bad?

No, it’s not so. It also has its own advantage.
This is a great facility for those who cannot spend a large amount at a time. No-cost emi you buy expensive goods Able Makes You will renounce the discount, to repay that items in small parts Facility Let’s buy

So what should you do?

Next time you see the offer of ‘No-Cost EMI’, do not click on it blindly.

1. Always compare: First of all, check that if you make the entire payment together, then how much will you get that stuff.
2. Calculate: Now see how much its total cost is on no-cost EMI.
3. See hidden fees: Is there any processing fee or any other charge?
4. Decide: If there is not much difference in the price of upfront payment and EMI and you need installments, this can be a good option for you.

In short, no-cost EMI is a feature, no free gift. Use it only by making full understanding and your account.