How do companies make money with no cost EMI?
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.
What happens in 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 the benefit of no cost EMI to the company?
a) When discounts equal interest: Under the 3-month EMI plan, at an interest rate of 15\%, you would have to pay an interest amount of Rs 4,500. But in Zero Cost EMI, you are exempted of discount and you pay the original price of the Smartphone in EMIs.
How does bank benefit from no cost EMI?
Advantages of no-cost EMI: No-cost EMIs help people buy aspirational products that are of high value by paying in instalments,” explained Saxena. Opting for No-cost EMIs will also help you build your credit history by taking smaller loans provided you pay your EMIs on time.
What is the difference between no cost EMI and standard EMI?
How does zero cost EMI differ from a regular EMI scheme? The major difference is when you choose to pay for a product through regular EMIs, your EMI amount consists of the interest component and the processing fees. And when you choose no cost EMI, you can convert the price of your product into interest-free EMIs.
Which is best no cost EMI?
Banks offering no cost EMI on Flipkart and Amazon The top two e-commerce websites in India – Amazon and Flipkart have tie-ups with multiple banks to offer no cost EMI to customers.
What is upfront discount on no cost EMI?
However, in no cost EMI scheme, you have to forego the discount and pay the original price of the smartphone in EMIs. So, what it means to you? If you pay for the phone upfront, you get the discount of ₹4500, this means you get the smartphone at a discounted price of ₹ 25,500.