No Cost EMI: What does No Cost EMI mean, the facility is not available for free, know everything about it...

 
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The festive season has started in the country. During this time, different e-commerce companies and retail stores organize festive sales. In the sale, you get various offers on different products. Apart from this, different types of offers are also available on credit cards and debit cards of different banks. During this time, many banks provide No Cost EMI or Zero Cost EMI facilities to their customers. Let's know what No Cost EMI.

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Zero Cost EMI or No Cost EMI means that if you have purchased any goods on credit, then you will not have to pay any additional interest on the principal amount. You only pay the actual price of the goods in easy installments without any additional cost.

Interest is included in the price of goods.
These things sound very good to hear, but the bitter truth of the market is that nothing is available for free here. No-cost EMI also has a price in the market. In no-cost EMI, interest is indirectly included in no-cost EMI by charging a higher price for the goods, so there is no extra charge for interest. According to experts, zero-cost EMI or no-cost EMI is nothing but a marketing gimmick. The interest on the loan is charged by the customers in some other form.

Companies' game
Companies take a good discount on the product even before offering no-cost EMI. For example, you are buying a mobile worth Rs 20,000 from a store. You take the facility of no-cost EMI and convert the amount of Rs 20,000 into EMI. In such a situation, you will feel that the price of the mobile is being charged to you. But the company must have already taken a discount from the mobile manufacturer on the price offered to you. The store must have bought the mobile worth Rs 20,000 for Rs 15,000 or Rs 16,000. In such a situation, the store does not incur any loss even if it offers no-cost EMI.

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How is no-cost EMI calculated on a credit card?
If you buy any item on no-cost EMI using a credit card, then the credit limit is reduced by the amount of the price of the item. For example, you bought a TV for Rs 18,000 on a 6-month no-cost EMI. After making the purchase, the bill for that month will be prepared and if your credit limit was Rs 50 lakh earlier, then it will reduce to Rs 32,000. After paying every EMI, your credit limit will increase by Rs 3,000 each.

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