No-cost EMI enables customers to purchase goods with no interest for purchases made online or offline.
Before purchasing anything on a no cost EMI, do collect information about the additional or hidden charges.
You may be familiar with the no-cost equated monthly installments (EMIs) if you have ever done any online shopping. A highly successful programme called no-cost EMI enables customers to purchase goods with no interest for purchases made online or offline. When we purchase something using an EMI, we typically pay the whole cost of the item plus the interest rate for the specified time period; but, with a no-cost EMI, there is no processing fee, no interest, and no down payment necessary.
We will explain what no-cost EMI is and how businesses go about offering it to the customers.
A consumer can purchase a product using an EMI option through the no-cost EMI scheme without making a down payment, paying a processing fee or any interest on the amount. The no-cost EMI is a very cost-effective programme that enables users to make payments in equally divided principal amounts without paying interest. The term is typically quite short compared to other EMI plans, with a maximum of one year and a minimum of three months.
The RBI Guidelines state that no financial institution may offer any user a zero per cent interest rate, which raises the question of whether or not the no-cost EMI is a legitimate programme. Yes, it is true, but there is a twist. When you use the no-cost EMI option, you pay the bank an EMI with no-cost, which is just the product’s retail price. The seller and the platform split the cost of the interest, though.
No Cost EMI is a marketing gimmick since the final amount you pay is set up so that the bank interest that the platform and seller must pay is passed to the customer. The Extra amount on the no-cost EMI may be paid in one of two ways.
In this instance, the discount offered by the vendor is equal to the product’s interest. So, no-cost EMI operates on the product’s actual price rather than the discounted price, making it simpler for sellers to offer the no-cost EMI and charge the consumer the desired amount.
The vendor may also include the interest in the price of the item as payment for the interest. The amount paid by the customer becomes equal to the interest paid by the seller when they choose no-cost EMI.
During the festival season, there are additional no-cost EMI deals. Now, if you’re considering using this to shop on Akshaya Tritiya as well, keep a few things in mind. Reports claim that the items for which this capability is provided can be expensive. On no-cost EMI, some businesses further impose processing fees. In addition, you can also be required to pay a shipping fee for the items you buy through this option, but you would not if you just made a regular purchase.
Before purchasing anything on a free EMI, you should gather information about the cost of the item on other e-commerce websites or in stores. Make sure you are familiar with the e-commerce company or store’s terms and conditions, tenure, processing fee, pre-closure fee, prepayment penalty, and late payment charges. After seeing all of these, you will be able to determine whether this strategy actually saves you money or if the business is misleading you by offering no-cost EMI in order to sell you the goods.
Read all the Latest Business News, Tax News and Stock Market Updates here