No Cost EMI Tips: Do customers benefit from shopping through No Cost EMI? Know the truth..
No Cost EMI: The month of October is going on. There are many festivals in this month. In such a situation, people will also do a lot of shopping. Given all this, huge discounts have also started on all online platforms. From Flipkart, and Amazon to all e-commerce sites, sales are going on and people are shopping fiercely. In such a situation, these companies also give the option of Cost EMI to the customers for shopping. This option is not only available in online shopping but you are also being given this option at many showrooms. Through Cost EMI, the customer gets the facility to buy goods in interest-free installments. Customers like this deal because they also buy the necessary goods and they do not have to pay the lump sum price.
By paying EMI with the facility of zero percent interest, they easily pay the price of the product. Regarding zero percent interest, the rule of the Reserve Bank of India (RBI) also says that there is no such facility in case of a loan. If you have taken a loan, then it will have to be repaid along with the interest. In such a situation, the thing to think about is how customers get the facility of paying interest-free installments in the name of Cost EMI. Are customers benefited in this or is this offer just to lure? Let's understand the math of No Cost EMI.
Companies also remain in profit in No Cost EMI
Even before offering No-cost EMI, companies take a good discount on that product. The price offered to you does not include that discount. Understand with an example - Suppose you are buying a mobile worth Rs 25,000 at a showroom. You got the amount of Rs 25,000 converted into EMI by taking the facility of Cost EMI. In such a situation, you will feel that whatever is the cost of the product, the same is being charged to you. But in reality, the company would have already taken a discount from the manufacturer on the price offered to you. The company would have bought a mobile worth Rs 25,000 for Rs 18,000 or Rs 20,000. In such a situation, when the company gives you the EMI option at the offered price, it does not incur any loss, rather it remains in profit.
Apart from this, if any discount or offer has been offered on that product during the festive season, then you do not get that discount during no-cost EMI. Meaning if a 10 percent or 20 percent discount is being given on the sale of a product, then you will have to pay the lump sum price to get that discount. If you buy a product with the facility of no-cost EMI, then you will not get that discount. Apart from this, processing fees are also charged from you while taking the facility of no-cost EMI. Also, 18% GST and bank service charges are charged to you on the interest.
What does RBI say about zero percent interest?
Regarding this, the rule of the Reserve Bank of India says that there is no such thing as a free lunch in the case of loans, that is if you have taken a loan, then it has to be repaid with interest. This is the reason that whenever you take any kind of loan, personal loan, home loan auto loan, etc. from the bank, your EMI is calculated including interest. On the other hand, in the Zero Cost EMI scheme on credit card outstandings, the interest amount is often recovered in the form of processing fees. In the case of zero-cost EMI, RBI has clearly instructed the banks that there is no transparency regarding the interest rates in such loans, so any such offer should be avoided.
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