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No Cost EMI Calculator

Understand the true cost of No Cost EMI offers. Calculate effective price, hidden charges, and see if No Cost EMI is actually beneficial for you.

No Cost EMI Calculator

The listed price of the product.

Discount received for choosing No Cost EMI (leave 0 if none).

Expected cashback from card or retailer (leave 0 if none).

One-time processing fee charged (leave 0 if none).

GST applied on processing fees or other charges (leave 0 if none).

Worked Example

Here is an example to help you understand how the calculation works:

Item Amount
Product Price ₹1,00,000
EMI Discount - ₹5,000
Cashback - ₹5,000
Processing Fee + ₹199
GST on Charges + ₹36
Effective Cost ₹90,235

In this example, you save ₹9,765 overall. The hidden charges (₹199 + ₹36 = ₹235) reduce the total savings from ₹10,000 to ₹9,765.

Understanding No Cost EMI

What Is No Cost EMI?

No Cost EMI is a promotional offer where you pay the same price as the product's cost in installments, without paying any additional interest. The bank or retailer absorbs the interest cost instead of passing it to you.

How No Cost EMI Works

When you choose No Cost EMI, the bank charges interest to the merchant, not to you. The merchant compensates by offering a discount equivalent to the interest amount. This discount effectively reduces the product price to offset the interest that would have been charged.

Hidden Charges To Watch For

  • Processing Fees: Many banks charge a one-time processing fee for EMI conversions.
  • GST on Fees: GST (18%) is applicable on processing fees and other charges.
  • Early Closure Fees: Some banks charge fees if you close the loan early.
  • Foreclosure Charges: Charges may apply if you prepay the outstanding amount.

When No Cost EMI Is Worth It

  • The total savings (discount + cashback) exceed the hidden charges.
  • You would have bought the product anyway with full payment.
  • You can manage the monthly EMI comfortably within your budget.
  • The offer is from a reputable bank or retailer.

When Paying Upfront Is Better

  • The hidden charges (fees + GST) exceed the savings from the offer.
  • You have sufficient funds to pay the full price upfront.
  • You might spend more on other items due to the EMI habit.
  • The offer has unfavorable terms like high foreclosure charges.