Shopping with a no-cost EMI (Equated Monthly Instalment) option can be a convenient way to make big-ticket purchases without ‘paying’ any interest. However, it’s crucial to keep certain things in mind to ensure a smooth and hassle-free experience. No-cost EMI is a payment option offered by retailers or financial institutions where you can make purchases and repay the amount in instalments without incurring any additional interest charges.
No cost EMI
The cost of the item is spread over equal EMIs, making it seem interest-free, but the actual cost remains the same. No cost EMI can be a convenient and affordable way to purchase expensive items. However, it is important to be aware of the terms and conditions of the offer and to shop around for the best deals.
No-cost EMI is popular in India because it allows consumers to purchase expensive items without having to pay the full amount upfront. It is also a good option for consumers who cannot afford to pay high interest rates on loans.
However, it is important to note that no-cost EMI may not truly free. The merchant or lender subsidises the interest cost, which means that you are still paying interest, but it is not explicitly charged to you. This is often done by increasing the price of the product or by offering a smaller discount than you would get if you paid upfront.
Here are some things to remember while shopping with no cost EMI;
Understand the Terms and Conditions: Read and understand the terms and conditions of the no-cost EMI offer. Ensure that you are aware of any hidden charges or fees.
Check Eligibility: Confirm that you meet the eligibility criteria for availing the no-cost EMI. It may depend on factors such as your credit score, the minimum transaction amount, and the selected tenure.
Select the Right Tenure: Choose the EMI tenure wisely. While longer tenures may result in smaller monthly payments, they could end up costing you more in the long run. Evaluate your financial situation and opt for the shortest tenure you can comfortably manage.
Hidden Charges: Be cautious about any hidden charges. Even though it’s a no-cost EMI, there might be other fees, such as processing fees or GST, which could apply.
Credit Limit: Ensure that your credit limit is sufficient to cover the purchase. Exceeding your credit limit may result in additional charges or rejection of the EMI request.
Payment Timely: Make sure to pay your EMI on time every month. Late payments could result in penalties or interest charges.
Product Pricing: Verify that the product’s price under the no-cost EMI scheme is the same as the regular price. Sometimes, merchants may inflate the base price to compensate for the interest they bear on your behalf.
Seller Reputation: Purchase from reputable sellers or platforms to avoid potential issues with the EMI process. Check customer reviews and ratings before making a purchase.
Cancellation Policies: Understand the cancellation and refund policies in case you need to return the product. Some EMI schemes may not offer a full refund, and cancellation charges may apply.
Credit Score Impact: Keep in mind that opting for no-cost EMI may still impact your credit score, as it involves a credit check. Ensure that you are comfortable with any potential effects on your credit history.
Keep Documentation: Maintain a record of all relevant documents, such as the EMI agreement, payment receipts, and correspondence with the seller or financing institution.
Customer Support: Familiarise yourself with the customer support channels provided by both the seller and the financing institution. In case of any issues, having prompt and reliable support can be crucial.
If you are considering using no-cost EMI, it is important to weigh the pros and cons carefully. No-cost EMI can be a convenient and affordable way to purchase expensive items, but it is important to use it responsibly.
It is important to be aware of your spending capacity. No-cost EMI can make it easy to overspend, as you may not feel the full impact of the purchase until you start making the monthly payments. Make sure that you can afford the monthly EMI payments before making a purchase. Do not overspend just because you can avail of no-cost EMI.
Comments
0 comment