As the festive season approaches, both online and offline retailers are rolling out enticing offers, especially in the form of no-cost EMI schemes on gadgets and home appliances. While these EMI options might seem like a convenient way to make purchases, it’s essential to understand how they work and what you should consider before opting for them. In this blog post, we’ll explore 5 Key things to Know Before opting for No-Cost EMI Schemes.
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How Does No-Cost EMI schemes work?
When you choose a no-cost EMI option, you don’t have to pay the entire product price upfront. Instead, you can pay for the item in installments without incurring any interest charges. However, it’s crucial to note that the interest burden is not truly eliminated. Manufacturers or sellers bear this cost, which they often recoup by selling more products.
Are There Trade-Offs When Opting for No-Cost EMI schemes?
Yes, there can be trade-offs. In some cases, customers who opt for no-cost EMI may lose out on other benefits like discounts and offers. Or, The actual product price might be adjusted when EMI is chosen, and the interest burden might be covertly added to the cost of the goods.
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When Is It Beneficial to Choose No-Cost EMI?
Financial experts recommend opting for no-cost EMI when you’re purchasing expensive items and can’t pay the full amount upfront. It’s often a better choice compared to making credit card purchases and converting them into installments, as credit card EMIs can carry interest rates of 20-25 percent.
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What Should You Keep in Mind When Considering No-Cost EMI?
- Some no-cost EMI schemes have shorter tenures, resulting in higher installment amounts.
- Timely payment is crucial to avoid a negative impact on your credit score and the imposition of fines.
- Be cautious about accumulating excessive debt through no-cost EMI, which can negatively affect your credit score.
- Only a select number of companies offer no-cost EMI, and it’s available for specific items. Don’t make a hasty decision based solely on this payment option.
- Sometimes, a substantial down payment may be required.
- Keep an eye out for additional charges like processing fees, which companies may levy.
How can customers ensure transparency when considering No-Cost EMI?
- Compare prices across online and offline retailers to determine if the interest burden is already included.
- Understand all applicable rules, including installment amount, number of months, fees, and prepayment charges.
- Keep track of EMI payment due dates to avoid late fees
Disclaimer:
The content provided in this web post is for informational purposes only and should not be construed as financial advice. Readers are encouraged to consult with financial professionals before making any significant financial decisions.
