No-Cost EMI: Good or Bad Option?

No-cost EMI offers are one of the most popular schemes in the market, and they have allowed customers to get their hands on the latest products without denting their pockets or having to dig into their savings. Therefore, most merchants have come to embrace this new scheme of things and have started offering no-cost EMI offers across a range of consumer durable items.

What Does No-Cost EMI Mean? 

There are two kinds of EMI options that the market offers: Regular EMIs and No-Cost EMIs. Whenever you opt for a regular EMI, you only need to make a marginal down payment and the remaining price of the product is paid for by the financier, and you are expected to repay that amount with interest charges within an agreed timeframe. 

However, when you opt for a no cost EMI Mobile option, you only pay the agreed cost of the product and nothing else apart from that. The only downside to this scheme is that you won’t get any discount on the product that you would have got in case you had chosen to pay upfront. 

But, a no-cost is good nonetheless because it saves you a lot of money that would have otherwise gone into repaying the interest accrued on the debt.

How Does a No-Cost EMI Work? 

For a no-cost EMI to work there need to be three stakeholders- The customer, the merchant, and the financier. No-cost EMI schemes are mostly offered by sellers who have tie-ups with banks and other financial institutions that allow them to extend this scheme to the customers. Typically, the discount on the products is paid to the banks, and the customer only pays back the full price of the product minus any interest rates.

Benefits of No-Cost EMI Offers

No-cost EMI schemes benefit customers in more than one way, and to be honest they are great schemes that have allowed people to shop for high-value goods without sacrificing their savings. Let’s look at a few benefits that you get when you opt in for a no-cost EMI scheme!

Higher-Value Transactions 

Opting for a no-cost EMI lets you purchase items of a much higher value than what your pocket would have allowed. Since there are no down payments or interest charges involved, it makes it even more enticing to opt for these schemes as they save you a lot of money.

Makes you Financially Disciplined

Since loans need to be repaid on time, a person develops financial discipline. This helps people make more informed choices when it comes to buying products.

Prevents Impulse Buying 

Most of the time people end up buying products that they don’t want. However, when you opt for a loan, it psychologically impacts you as you need to pick your products carefully, or else you might end up being caught in a debt trap.

Benefit from the Competition

The market is flooded with multiple retailers and financial institutions trying to grab the consumers’ attention, and therefore, they may offer customized schemes to ensure that they are the ones who get to service a loan or make a sale. This gives the consumer the upper hand when choosing which ones to opt for, giving them a better deal on the purchase laptop on EMI.

Improves your Credit Score

Taking a no-cost EMI option and repaying on time improves your credit score. The higher your score, the more loans you can take in the future as long as you maintain the score within acceptable limits. This can come in handy when you want to opt-in for loans of a higher value like Property Loans, Car Loans, Personal Loans, etc.

No-cost EMIs have turned the market upside down by giving consumers the option to buy any product of their choice without compromising their quality of life. 

So, if you are a consumer and want to buy that latest consumer durable product, then it’s the best to go as you won’t need to pay anything upfront, and can walk away without all those interest charges!

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