Why It Sounds Convincing
Buying something today and paying over a few months, apparently without interest, sounds like an easy deal.
The Missing Context
In a no-cost EMI offer, the seller or manufacturer may give a discount that offsets the interest charged by the lender. That can be a genuine offer, but it doesn't guarantee the lowest total price. Sometimes paying in full gets you a better discount. Processing fees and applicable GST can also add to the cost. Suppose a phone costs ₹30,000 through no-cost EMI, but the same phone is available for ₹28,500 when you pay upfront. You're effectively paying ₹1,500 more for the EMI option, even if the advertised EMI interest is offset. Other offers may work out just as well as paying upfront, so check the numbers rather than dismissing them all.
Check Before You Believe It
Add up every EMI, any upfront payment and all fees or taxes. Compare that amount with the best available pay-in-full price. Also check late-payment charges and what happens if you close the EMI early.
Quick Takeaway
Compare the final bill, not just the words 'no-cost'.