No-Cost EMI: The Hidden Costs Behind the Tempting Offer

• No-cost EMI is widely offered on online platforms for various products, promising interest-free installments.
• The 'no-cost' aspect typically means the seller or platform absorbs the interest, presenting it as a discount.
• A common catch is the loss of instant discounts, cashback, or festive offers when opting for no-cost EMI, making the product more expensive.
• Banks often charge processing fees and GST on the interest portion, adding to the actual cost, which is usually hidden in fine print.
• Multiple EMIs can increase credit exposure, potentially impacting future loan applications, a concern highlighted by the Reserve Bank of India.

Why It Matters: No-cost EMI offers convenience but often comes with hidden costs like lost discounts and fees.