No Cost EMI: The no-cost EMI facility on credit cards is gaining significant traction in India. This option allows customers to purchase high-value items and repay the amount through manageable monthly installments without incurring any extra interest. It presents a convenient payment method.
Fees that companies may impose
However, many users remain unaware of the fees that companies may impose under the guise of no-cost EMI, often assuming that no additional charges apply. This discussion aims to clarify the concept. No-cost EMI enables customers to break down the cost of a product into fixed monthly payments, with no extra interest required. The primary benefit is that consumers can avoid making a substantial upfront payment.
Major online shopping platforms such as Amazon and Flipkart, along with various large retail outlets, offer this facility in collaboration with banks like HDFC Bank, SBI, and ICICI Bank. Despite the term “no-cost,” there may be hidden terms and conditions involved. The interest rate could either be factored in as a discount by the merchant or included in the product’s price. Additionally, banks may impose a processing fee ranging from 1% to 3%. Consequently, customers may not truly experience a no-cost EMI, as they end up paying indirectly.
The Reserve Bank of India (RBI) has cautioned that no-cost EMI schemes could potentially breach fair pricing regulations, given that charges might be concealed within the product price or as processing fees. Therefore, it is essential for customers to thoroughly review all terms and conditions prior to utilizing this facility.
Disclaimer
This is general information based on available online sources. Please verify before making any transactions. Times Bull is not responsible for any financial investments made, as it is entirely your responsibility. For better results, please consult a financial advisor.