'No cost EMI' on premium TVs, mobiles, luring? Watch out

'No cost EMI' also known as 'zero cost EMI' fulfils your immediate desire to buy any premium TV, cell phone, refrigerator or washing machine without supposedly incurring interest rate. The only hitch, however, is companies possibly offer no extra benefit. They deny discounts and adjust interest rate in the price of the product. Regardless, many are going for it considering the convenience of paying through instalments.

Hyderabad: No need to bother, no cost EMI fulfils your immediate desire to buy any premium product without incurring interest rate. No money required to buy an expensive smart TV or a premium mobile phone. The only hitch, however, is possibly no extra benefit is offered under this. They deny discounts and adjust interest rate in the price of the product. Willing consumers are going for it considering the convenience of paying through instalments.

During festival season and special occasions, lots of discounts and concessions are being offered. Top-end consumer electronics and home appliances are no exception. Everybody is trying to upgrade to high-tech goods in order to catch with the fast-paced digitalised life these days. At such a time, what aspects need to be considered before making zero cost EMI purchases online. Take a look.

First, we must be prepared to lose some to gain some. Discounts are usually offered when total amount is paid at one go. If zero cost EMI facility is to be used, we must get ready to lose discounts. For example, an appliance worth Rs. 5,000 is up for sale at 10 percent discount, then we have to pay Rs. 4,500. This discount or any benefit to that extent will not be given under zero cost EMI.

Somehow, companies will recover the cost some way or other. If the production cost of an item is Rs. 5,000, one may have to pay Rs. 500 EMI for 12 months. It means 20 percent extra cost is paid additionally, which comes to Rs 1,000. Then, the cost of that item will come to Rs. 6,000. Though they say it is no cost EMI, the loss towards this will be recovered by denying discounts or by collecting processing fee.

Another practice followed by companies is that they show interest rate separately during normal EMI purchases. But in zero cost EMIs, no interest is mentioned separately. However, the cost of the product would come to more or less the same. The immediate benefit under zero cost EMI is consumer need not worry about mobilising all the money to pay total cost at one go.

No cost EMI is very useful in times of purchasing a very expensive product for which one may not be able to mobilise total amount. Moreover, the e-commerce firms and traders offer special discounts if such purchases are made through specific debit or credit cards. All these factors need to be studied for taking maximum benefit under these facilities.

Rules pertaining to instalment payments will apply to the zero cost EMI purchases as well. Any defaults will reflect badly on credit score. Check your repayment capacity when one or more instalments are pending. You have to closely examine advance payments or late payment penalties under no cost EMI offers. Go for it only when everything suits your needs.

You can purchase refrigerator, washing machine or any appliance at zero cost EMI (equated monthly instalment). Companies and online commerce firms are offering this facility on all types of consumer goods. Whether you have cash at your disposal or not, any appliance or device can be bought just at the click of a button.