It is not strange in today’s world to pay for goods or services in manageable installments or EMIs. For many years, big-ticket retailers have offered this service to loyal clients. However, the pandemic has negatively impacted Indian customers’ ability to purchase goods, necessitating the development of cheap payment methods in various industries. No Cost EMI appears to be a byproduct of the predicted rise in Buy Now Pay Later implementation in the nation at a rate of 28.9% CAGR from 2021–28.
Let’s understand everything about no cost EMI!
What is No Cost EMI?
For customers to pay for their goods in EMIs stretched out over a repayment period, retailers (both online and offline) frequently offer a no cost EMI payment option. The 0% interest charged over the entire amount, hence the name, is what makes it an attractive offer for the end-users. This choice has no interest fees, unlike most EMI payment options, which have high-interest rates.
For example, a consumer who purchases a product for Rs. 28,000 and chooses a 4-month interest-free EMI plan will only have to pay Rs. 7,000 per month.
You should be aware that certain retailers may charge clients filing fees or processing fees in order to use this service. Depending on how each merchant decides to fund the no cost EMI option, these terms and restrictions may differ.
How does No Cost EMI work?
Customers can split the whole cost of their purchases into a few EMIs without paying interest when you offer a no cost EMI option on your online store. Most of the time, online retailers display the computed interest as a discount off the value of their basket, splitting the total amount without any additional fees.
To comprehend how no cost EMI offerings function generally, think about the following example:
A consumer decides to spend Rs. 27,000 on a product. According to the terms, the 3-month EMI plan has a 10% interest rate. This means that if he selects this plan, the first EMI will be Rs. 9,000 + 900 = 9,900.
However, the merchant will demonstrate that they are giving a reduction that equals the interest charged throughout the three-month period with the no-cost EMI offer, keeping the total repayment amount the same i.e Rs. 27,000 in this case.
Advantages/Benefits of No Cost EMI for Customers
Offering a free EMI option can help customers purchase from your online store depending on the type of goods or services you sell. Some of the key benefits of no-cost EMI for buyers are listed below:
1. Big-ticket items are simple to purchase with low EMIs
Certain costs are unavoidable, whether they are for everyday living expenditures or exceptional occasions. Due to the potential effects on other expenses and savings, many consumers decide to postpone purchasing pricey items like smartphones, refrigerators, etc.
You may let potential clients buy from you without worrying about the complete cost that must be paid upfront if you offer a no cost EMI option on your online store.
2. There is no interest due
In most cases, the interest component already constitutes a sizeable portion of the distributions managed by an earner. People already pay a sizable amount each month in interest beyond the repayable amount on all types of loans, including personal, auto, and house loans. This is why including a different source of interest in a transaction may seem difficult.
You give these people the option to buy from you with a zero-cost EMI without having to pay any additional interest on the purchase price.
3. Easily available online
Banks have historically provided free EMIs to consumers who have a credit or debit card in exchange for certain paperwork. However, the new-age fintech companies are setting new standards by offering free EMI offers to everyone with sound financial standing.
You can take advantage of no-cost EMI offerings even if you don’t have a credit card, debit card, or credit rating because the process is entirely online. Enter your information for the KYC process once, and you can get free EMI on your Aadhaar card. Furthermore, several new-age fintech companies charge no upfront costs.
In this manner, you can make a bulk payment and pay off your monthly obligations well in advance if you receive a bonus or have adequate savings.
Therefore, whether you want to buy a new laptop or book a trip, you can now afford it without having to pay extra fees for EMI payments.
Where can you use a No Cost EMI?
Customers can purchase the following items while using this payment method during online shopping:
1. Smartphones
A new smartphone with the newest ergonomic designs and upgraded functions is released almost every month. Technophiles are constantly searching for the newest gadgets because new phones are introduced to the market so frequently.
The price is obviously the only obstacle to getting your hands on the best phone available. However, thanks to the availability of free EMI items both online and in physical places, these are no longer costly.
2. Laptops
Since there are so many laptop brands to choose from and each one offers a wide range of specifications and the most recent technology, purchasing a laptop requires extensive research. You should choose a laptop carefully because they can be highly expensive and only last for a few years. Regardless matter the model you choose, buying a laptop has become quite reasonable thanks to the no-cost EMI option.
3. Expensive accessories and clothing
Few people are aware that you may buy garments on EMI, even though many people are familiar with the idea of EMI for electronics and furniture. Your money and your budget shouldn’t be a barrier to your ability to express yourself via fashion. Have you ever desired to purchase the most up-to-date lehenga choli for a festive occasion or the nicest wedding sherwani for a cousin’s wedding but were unable to do so due to the cost of these garments? You can get ready to stroll into any room and be the most stylish person there with no-cost EMI!
4. Furniture
The correct furniture may make a house feel more like home. One of the most crucial components of any home is a comfortable couch to curl up in after a hard day, a strong dining table for family meals, and a big bed to unwind in.
But one of the most expensive investments you can make for your house is furniture. Even just purchasing contemporary dressing table furniture online occasionally costs more than your monthly salary. As a result, free EMI on furniture might be a tremendous help whether you’re trying to furnish your home or simply give it a makeover.
5. Travel packages for holidays
Everyone imagines taking a fantastic vacation by flying to their ideal location. However, given the generally high travel, lodging, and food prices, vacation packages can be rather pricey. Not to mention that it can be confusing to look up hotels on one website while booking flights on another.
6. Online learning courses, and more
Online learning has grown to be a well-liked and practical choice for students and working professionals, with over 5 million students taking online courses annually. The most reputable platforms not only let you learn at your own pace and in your own time, but they also provide courses taught by experts in their industry.
However, You can now save more by obtaining an immediate student loan online with free EMI on online courses!
Get quick loans for students to help you pay for everything from online tuition classes, coding classes, and online courses to learning programs with colleges, and more.
Conclusion
So, now you know everything there is to know about no-cost EMI in India you must be more clear about your future purchases. You can still obtain cardless EMI even if you don’t have a credit card, and you won’t ever have to click “add to wishlist” again! Your budget will stay intact!
Also, for any business offering a free EMI facility will make the products more accessible to customers, whether you sell expensive or inexpensive items online.
FAQs
1. When should a buyer choose a No Cost EMI?
Ans: When they wish to purchase a pricey item but lack the funds for an upfront payment, consumers might choose this method of payment.
2. What distinguishes a No Cost EMI plan from a standard EMI plan?
Ans: Customers are required to pay the interest component and any applicable processing costs when using conventional EMI schemes. On the other hand, interest-free EMI simply means no cost EMI.
3. How is the No Cost EMI calculated?
Ans: Simply dividing the total amount due by the number of months a client chooses to pay the EMIs yields the no cost EMI.
4. Which payment options are available for No Cost EMI?
Ans: In the best-case scenario, this is accessible with credit and debit cards authorised by significant Indian banks.
5. What is the EMIs full form?
Ans: The EMIs full form is Equated Monthly Instalment.
