No-cost EMI is one of the popular options that people consider when buying expensive items or something out of budget. When you use this option, you can buy the essentials in monthly installments without paying any extra interest. But is this really a good idea? Let's understand what No Cost EMI is, how it works, and whether it is a good choice or not. Here are some other options to help you make the right choice.

What is No Cost EMI?

Simply put, no-cost EMI means that you can pay in monthly installments without incurring additional interest when you buy something. With the no-cost EMI option, you can pay the overall price of the product in just a few months. This is different from the regular EMI where you have to pay the cost of the product and some interest.

How does No Cost EMI work?

When you choose No Cost EMI, you are buying a product using a credit card or a finance option like CASHe. Now, what happens is that the cost of the product is divided into monthly installments. For example, if the price of the product is ₹60,000 and the EMI period is 6 months, you will have to pay ₹10,000 every month. Here, a major no-cost EMI benefit is that you don't pay any extra cash on interest. However, there may be a small processing fee.

Advantages and disadvantages of No Cost EMI

The advantages;

- Splits large payments into smaller ones
No extra fee
Many online stores offer.
- Helps you avoid using savings on your purchases.
Makes it easier to buy expensive items

Disadvantages

There may be hidden fees, such as processing charges.
Only some products are available.
You may lose discounts and cashback.
A credit card is required
Wrong payment terms can damage your credit score.

When should you consider No Cost EMI?

Here are some situations where using No Cost EMI can help you:

For larger purchases: You don't have to pay all the money upfront when you need to buy something more expensive, such as a TV or laptop.

If there's no better offer: If you don't get any discounts or cashback, no-cost EMI can help you increase the cost.

If you are sure about the repayment: Choose No Cost EMI only if you know that the monthly payments can be made without any problems.

To manage your cash flow: If you're paying the installments that fit your monthly budget rather than paying the full amount, opt for No Cost EMI.