No-cost EMI: Is it really worth it? Evaluate pros and cons before making purchases this Diwali

livemint.com:

credit cards, and the services of fintech companies that offer the “Buy Now, Pay Later" option. Opting for a no-cost equated monthly installment (EMI) plan while shopping can provide a hassle-free way to make significant purchases without incurring any interest expenses. However, it’s essential to bear a few considerations in mind to ensure a seamless and trouble-free experience.

No-cost EMI is a payment choice provided by retailers or financial institutions, enabling you to buy products and repay the total cost in manageable installments, sans any added interest fees. No-cost EMI proves to be a favoured financing choice among shoppers as it enables them to acquire high-value items without incurring any interest charges. This approach effectively spreads the expense of substantial purchases, rendering them more budget-friendly.

Nonetheless, it’s vital to recognise that no-cost EMI isn’t entirely cost-free. The retailer or financial institution still profits from the arrangement, often by imposing a higher interest rate on the retailer than what they would offer a customer seeking a conventional loan. Furthermore, certain retailers and financial institutions might impose a processing fee for transactions involving no-cost EMI.

However, not all products may offer the option of no-cost EMI, and the eligibility requirements can vary depending on the specific retailer and financial institution involved. A no-cost EMI is a payment scheme that permits you to divide the cost of a product or service into manageable monthly installments without incurring any interest. In essence, you’re only covering the product’s total price, devoid of any extra charges.