What is the actual cost of ‘No-cost EMI’ you pay?
Many ‘online’ and ‘offline retailers’ offer ‘No Cost EMI’ or ‘Zero Cost EMI’ on mobile phones, electronic items, etc. We do. This is the reason why people often find convenient to buy products on equal monthly installments (EMI). EMI reduces the burden of paying a large amount.
What is a no-cost EMI?
When you buy a product or service on EMI, you have to pay the same amount at a fixed time for a fixed period. It also takes interest as well. At the same time, in no-cost EMI, you only have to pay the price in EMI and no interest is to be given. That is, if 18000 items are bought on EMI given for 6 months then only Rs 3000 will be paid every month. That means you will only get Rs 18000 from your pocket.
If you want to reduce the burden of EMI, adopt this method
No-cost EMI works like this
No-cost EMI is a way to entice customers. Like interest given in ordinary EMIs, companies also count interest in it. It has two modes. The first method is that if companies give no-cost EMI option, then a discount on the one-time payment of the product, while at no-cost EMI, you have to buy the product at full price. The second way is that the interest is included in the product cost only. The reason for taking interest at no-cost EMI is that Zero persent interest from RBI is not permissible.
What does the RBI say about this?
In a circular of the year 2013, the Reserve Bank of India (RBI) said that no loan interest is free. The circular of 17 September 2013 states, “The amount of interest in Zero Percent EMI scheme on Credit Card Outstanding is often collected as a processing fee. . In the same way, some banks are charging interest from Bank Loan. Since Zero percent interest is not a trend, there is a transparent method that the processing charge and interest should be kept favorable to the product / segment, not Lone According to the wishes of the various institutes giving. A scheme like No Cost Emi is used only to entice and exploit customers.