Monthly EMI
Upfront Discount (Interest)
Loan Amount Disbursed
How Does No Cost EMI Work?
In a true "No Cost EMI" scheme, you pay the exact product price divided into equal monthly installments. However, as per RBI guidelines, banks cannot offer zero percent loans.
To make it "No Cost", the merchant provides an upfront discount equivalent to the total interest that the bank will charge over your EMI tenure. The loan is created for a lower amount (Product Price - Interest Discount), and the bank adds back the interest over the tenure so that your total payment strictly equals the product price.
Why Use a No Cost EMI Calculator?
- Understand exactly how much discount the merchant is giving
- Know the true loan amount created on your credit card
- Compare if buying upfront with a standard discount is better than No Cost EMI
Frequently Asked Questions
Is No Cost EMI really free?
Yes, for the consumer, you only pay the listed product price (plus any processing fees or GST on interest). The merchant bears the interest cost by giving you an upfront discount.
What about GST?
Banks typically charge 18% GST on the interest component of every EMI. This GST is usually borne by you and is billed to your credit card statement monthly, meaning a "No Cost EMI" might actually have a small cost associated with it.