Archive · 6 Dec 2025
No-Cost EMI Explained: Myths and Hidden Charges
No-cost EMI is a way to buy expensive things like phones or laptops by paying in small monthly parts without extra interest.
But it's not really free.
The store pays the interest to the bank, and sometimes there are small extra charges like taxes.
People think they're not paying more, but they might end up paying a little extra.
It's easy to use, but it can make people spend too much money and get into trouble.
Experts say it's important to think carefully before using no-cost EMI to stay financially safe.
No-cost EMI allows consumers to pay for high-value purchases in monthly installments without apparent additional cost.
Retailers absorb the interest cost paid to banks or NBFCs, making the scheme attractive for boosting sales.
Hidden charges like GST on the interest portion and processing fees can add up to Rs 1,500–Rs 1,700 extra.
No-cost EMI can encourage overspending and financial risk due to the ease of small monthly payments.
Consumers are advised to read all terms carefully and prioritize financial stability over instant gratification.
- Who
- Consumers, retailers, banks, and NBFCs
- What
- No-cost EMI schemes and their hidden charges
- When
- Currently and in the recent past
- Where
- India, especially on platforms like Amazon and Flipkart and major retailers
- Why
- To make high-value purchases more affordable and to boost sales
- Payment Method
- Cash Payment
- Amount Paid by Customer
- Rs 1,00,000
- Extra Cost to Customer
- Rs 0
- Who Pays the Interest
- No interest involved
- Payment Method
- Regular EMI
- Amount Paid by Customer
- approx. Rs 1,10,700
- Extra Cost to Customer
- approx. Rs 10,700
- Who Pays the Interest
- Customer pays interest directly
- Payment Method
- No-Cost EMI
- Amount Paid by Customer
- approx. Rs 1,00,000 (plus small charges like GST on interest portion or processing fees depending on issuer)
- Extra Cost to Customer
- typically Rs 1,500–Rs 1,700
- Who Pays the Interest
- Retailer pays the interest to the bank/NBFC