What is the benefit of no cost EMI?
A no-cost EMI offers you a plan where you can pay for a product or service in affordable monthly installments with zero interest. This means that you are only paying for the total price of the product, with no extra charges.
What is no cost EMI and how it works?
If you choose to buy the phone with a no cost EMI scheme, you have to pay the full price of ₹30,000, which is divided into EMIs. Part of this amount is paid to the retailer and the interest amount is paid to the financer. (b) When the interest amount is added to the cost of the product.
Is no cost EMI good or bad?
No-cost EMI can be a good option if the product you want to buy has a genuine discount. It is advisable not to opt for a loan to buy a product you don’t need, due to the temptation of zero-cost EMI. Also, if you get a loan to buy a product, don’t default on your EMI.
Does no cost EMI have hidden charges?
‘No cost EMIs’ is a misnomer because interest on the loan is built into the EMI except that the break up may not be clearly visible to the buyer upfront….’No-cost EMI’ offers on the online retailers.
| Cost of Mobile Phone | Rs 15,000 |
|---|---|
| Cost of Mobile phone post discount | Rs 12,750 |
Is no cost EMI good option Quora?
No Cost EMI is good option if you don’t want to pay complete amount at once. But you will be paying more in No-cost EMI. It is clearly mentioned that you will be charged GST on Interest. It is not just only for amazon.
How is no cost EMI calculated?
To make this a No Cost EMI offer, the interest amount will be discounted from the price of your order. Your card will be charged for the item price minus the discounted interest. The total amount you will pay to the bank (excluding GST) will be equal to the price of the item.
How does Bajaj Finance make money in no cost EMI?
Bajaj Finance’s consumer financing proposition is a win-win-win: Exhibit 2 below explains how BAF makes money when a consumer buys a TV on 0\% EMI. In such a transaction, BAF pays the manufacturer (eg. Samsung) upfront while it collects EMI’s from the customer over the tenor of the loan.
Why are EMIS bad?
Is an EMI scheme good or bad? Although a good EMI scheme is easy on your wallet, you must try to avoid it as the first option. You may not only be spending more than the actual worth of the product, but also splurging first and then relying on EMI payments is not healthy for your finances.
What is no cost EMI on Flipkart?
No Cost EMI Store. This EMI scheme from Flipkart is a special financial scheme that allows users buy expensive products under EMI, but not requiring them to pay any additional costs, including the interest and processing fee.
How do banks profit from no cost EMI?
The bank will charge GST on the interest amount. The bank will continue to charge interest on EMI as per existing rates. However, the interest to be charged by the bank will be passed on to you as an upfront discount at the time of your purchase, effectively giving you the benefit of a No Cost EMI.
Is GST applied on no cost EMI?
To make this a No Cost EMI offer, the interest amount will be discounted from the price of your order. The total amount you will pay to the bank (excluding GST) will be equal to the price of the item. The bank will charge GST on the interest amount.
What is no cost EMI in Flipkart?
How do ‘no-cost EMI’ schemes work?
Another way is by adding the interest cost in the price of the product. Here’s a look at how these schemes work. The most popular way through which online e-tailers offer ‘No-cost EMI’ is by offering discounts equivalent to the total amount of interest to be paid. Suppose the phone you want to buy costs Rs 15,000.
Is buying a product on EMI a good idea?
While buying a product on EMI takes away the burden of paying the huge cost upfront, there is always a cost that one has to bear on these ‘no-cost EMI’ schemes. ‘No cost EMIs’ is a misnomer because interest on the loan is built into the EMI except that the break up may not be clearly visible to the buyer upfront.
How does the 3-month EMI plan work?
Under the three-month EMI plan, the interest rate charged is 15 per cent and you would have to pay an interest amount of Rs 2,250. Essentially, you pay the original price of the phone in instalments: the retailer gets the discounted price and the balance (i.e., the ‘discount amount’) goes to pay the interest on the loan.