No Cost EMI exposed: Know the 3 hidden charges that empty your pocket..

Often, No Cost EMI comes as a big support during the festive season. Through this option, customers can buy goods in easy monthly installments without paying interest. This great option not only makes it easier to buy expensive products, but people are also able to buy the things they need. Goods are available without paying a lump sum amount, due to which customers are increasingly liking this facility.

What is the truth of No Cost EMI

On hearing the offer of No Cost EMI, customers feel that they are getting goods in installments without interest, but the truth is completely different from this. According to the RBI, interest is necessary on any loan, so how is this zero percent interest? Yes, according to RBI rules, customers cannot be cheated in the name of "No Cost EMI". Companies adjust their interest in hidden charges or discounts. There is no discount in MRP on some goods, while processing fees are added to some. That is, these offers are a way to lure the customer.

How to understand the whole game

No cost EMI sounds good, but what happens is that companies remove the discount on the product beforehand. For example, if a mobile is worth Rs 25,000 and you could get a discount of Rs 3,000 on it in the market, then that discount is removed while taking no-cost EMI. In such a case, you are paying the full price of the phone. That is, in no-cost EMI, "no cost" is just in name.

Misconception of customers

Usually, in no-cost EMI, the customer feels that he is taking it in equal installments without paying interest, but this is not the truth. Because the company already buys the product from the manufacturer at a huge discount, like a mobile worth Rs 25,000 is sold for Rs 18-20 thousand. Then it is sold to the customer in EMI at the same price, i.e., Rs 25,000. That is, the company does not incur a loss; on the contrary, it makes a profit. Therefore, in No Cost EMI, “No Cost” is only in name; the real price is hidden somewhere else. That is, if you are thinking of buying a product on No Cost EMI, then caution is necessary.

That is, if you take no-cost EMI, not only do you miss out on the discount, but you may also be charged processing fees, 18% GST, and bank charges. In such a situation, this deal is not as beneficial as it is shown to you. This is the reason why, whether it is a personal loan, home loan or auto loan - in every case, interest is included in your EMI. (Note: This article is for information only and should not be considered as investment advice in any way, it is suggested to consult financial advisors for investment)

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