The festive season is a hotspot for attractive deals and discounts, with retailers promoting “Zero-Cost EMI” offers to lure buyers. While these schemes seem to promise “Buy now, pay nothing extra”, they may hide processing fees, higher product prices, or indirect interest, leaving consumers with unexpected costs. Understanding how zero-cost EMIs work is crucial to avoid financial surprises.
How Zero-Cost EMIs Work
Advertised as Interest-Free: Retailers market EMIs as “zero interest,” making monthly payments appear equal to the product price divided by months.
Processing Fees: Banks or retailers may charge processing fees, which effectively act as hidden interest.
Higher Product Prices: Some products are priced higher during festive sales, absorbing the cost of the “interest” within the price.
Limited Tenure Options: EMI duration may be shorter than expected, resulting in higher monthly payments.
The term “zero-cost” can be misleading. Always check total payable amount and fees before committing.
Potential Hidden Costs
Processing Fees: A flat fee deducted upfront or added to the first EMI.
Down Payment: Some offers require a partial upfront payment, which is often overlooked in marketing.
Late Payment Charges: Missing EMI deadlines may trigger high penalties, negating the zero-cost promise.
Higher MRP: Retailers may slightly increase product prices to compensate for interest waived by banks.
Tips to Shop Smart During Festive Sales
Compare Total Cost: Calculate the total payment over the EMI tenure.
Check Processing Fees: Ask your bank or retailer about all applicable charges.
Read Terms Carefully: Understand tenure, down payment, and penalty clauses.
Look for Genuine Discounts: Ensure the product isn’t overpriced to offer “zero-cost EMI.”
Use Trusted Platforms: Shop through verified e-commerce platforms and banks for transparency.
Expert Advice
“Zero-cost EMIs are attractive, but buyers must read the fine print. Sometimes the cost is hidden in fees or product pricing. Always calculate the effective price before purchasing,” says a consumer finance expert.
Conclusion
Zero-cost EMIs can be convenient for festive purchases, but consumers need to remain vigilant about hidden costs. Checking total payable amount, fees, and terms ensures that “buy now, pay never” doesn’t turn into unexpected financial strain. Smart shopping is about combining deals with financial awareness.
FAQs
Q1: Are zero-cost EMIs truly interest-free?
Not always. They may include processing fees, higher product prices, or hidden charges.
Q2: How can I avoid hidden costs?
Check the total payable amount, processing fees, down payments, and penalties before opting for the EMI.
Q3: Can missing an EMI lead to extra charges?
Yes, late payments often incur penalties or interest, negating the zero-cost claim.
Q4: Do all banks offer zero-cost EMIs?
Only select banks and credit cards provide such offers, subject to terms and eligibility.
Q5: Is zero-cost EMI always a good deal?
It can be beneficial if the total payable amount equals the product price without hidden fees. Otherwise, it may cost more than a one-time purchase.
Published on : 12th October
Published by : SMITA
www.vizzve.com || www.vizzveservices.com
Follow us on social media: Facebook || Linkedin || Instagram
🛡 Powered by Vizzve Financial
RBI-Registered Loan Partner | 10 Lakh+ Customers | ₹600 Cr+ Disbursed
https://play.google.com/store/apps/details?id=com.vizzve_micro_seva&pcampaignid=web_share