No Cost EMI vs EMI

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No Cost EMI is new term from 2016 , where some online and offline stores provide zero cost EMI or 0% interest rate.

In Sept 2013 RBI (Reserve Bank of India) banned zero percent EMI schemes [notification]

In No Cost EMI scheme, some online stores like Flipkart, Amazon offer upfront discount on product which equal to interest paid to bank.

Generally in No Cost EMI maximum tenure is 12 Months or depends on seller.

Example of No Cost EMI Breakup

Product PriceRs 30,000
You will get instant discount at time of order-638
Bank Interest Charged every month+638
Finally you pay30,000

 

While in regular EMI from Credit Cards you have to pay internet as per credit card.

In Regular EMI you can opt for longer period of time like 36 month of EMI with very low monthly installments.

Example of EMI Breakup

Product PriceRs 30,000
Bank Interest Charged every month+638
Finally you pay30,638

 

Some non banking companies like Bajaj Finance, Home Credit also provide Zero Cost EMI from Offline stores and online stores as well.

 

Quick Comparison

No Cost EMIEMI
Available at selected Online and Offline StoresAvailable at Almost all Online and Offline Stores
Usually maximum tenure 12 monthsMaximum Tenure can be 36 months
Selected Bank’s Credit Card SupportAlmost all Credit Card Supports
Selected Product CategoriesAll Products Categories

Comment Below if you have any Questions or Feedback.

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