Just like you find the most exciting part about shopping to be the discounts rather than the actual stuff, thousands of online shoppers in the country feel a similar way. The situation is quite similar to this-you want something and someone offers it at a totally mind-blowingly low price with zero down payment and no interest. This sounds great, right? However, this deal seems so cool as initially, you end up spending more money than planned on impulse buys.
If you are someone whose wish list keeps getting bigger, you must have noticed How does no cost EMI works as schemes have been helping you buy big-ticket items in the recent past. The scheme is not a new one but is increasingly becoming the preferred mode of payment for people wanting a feel of a branded product. There are retailers who allow easy zero-cost EMI payment for mobile phones and other electronic appliances.
A Zero percent Discounting Rate (ZIR) on your EMIs is provided to you. It basically means your bank enjoys a discount in the form of interest. So, they will be paying the bank by providing a lower interest rate to you. The banks charge the retailers a higher interest rate, which goes into the revenue of the banks. It is basically a win-win situation for both the retailer and the bank.
There are two ways in which these schemes operate. One of the common ways is to forego the discount and instead pay this amount to the bank or financial institution to cover the interest cost. Another one is by adding the interest amount to the price of the product. Let’s look at these schemes in a bit of detail:
Under the No Cost EMI scheme, a retailer (seller) offers you discounts equal to the total amount of interest required. The money that would have been spent on paying interest goes towards the purchase of your product. This is not applicable if you opt for the 3, 6, or 12 months EMI. It only works under the No Cost EMI scheme.
A no-cost EMI essentially adds the interest amount to the price of the product. For instance, if a product costs Rs 15,000 and you have taken a three-month EMI plan, then the cost of your repayment will be Rs 5,750 per month. Sometimes the finance company may cover this amount as processing fees.
No Cost EMI is a payment option that enables you to buy products without paying the price in full right away. It can be used with credit cards as well as debit cards. Here’s how it works: Suppose you are getting a new phone worth Rs. 20,000/-. In this case, you need to pay only a part of the total amount i.e., Rs 4500/- in the first two months, and get an attractive discount on the remaining amount – 18,500/-.
No cost EMI is an option offered by many retail sellers and banks as a marketing scheme. In this scheme, the retailer tags the interest costs and processing fee to your credit card. What is no-cost EMI, how does no-cost EMI work with pinelabs? In the case of requesting a home loan, an election can be made by someone to take the loan through EMI. . This makes up for about 10-15% of the total cost and you can buy the product with little or no cash. The retailer benefits from stable cash flow, but you may end up paying more for your items than the actual price, plus other expenses like interest on your credit card balance.
