Should you go for EMI without credit card? Do you want to own your most desired smartphone or bring home an appliance that you cannot afford right away? What if you get an opportunity to pay for it across 6-12 months?
Yes, it is possible. No-cost EMI, also known as Zero Cost EMI on a credit card, is now a popular service offered by different financial institutions. The scheme aids you in purchasing your desired things on EMIs without interest charges. If you are not yet aware of it but tempted to know more, keep reading.
Why No Cost EMIs on Credit Cards are Ideal for You?
Unlike typical EMIs, no-cost EMIs on credit cards do not burden you with paying added interest or processing fees on the principal amount. Thus, the scheme offers you the scope to pay the actual cost of the item through Equated Monthly Instalments (EMIs). Take a look at some of its merits and demerits.
Advantages
- It is indeed a great advantage for people who cannot afford to pay the entire price in one go. So, you can get your desired item and pay for it over time.
- No-cost EMI on credit cards enables you to pay conveniently through easy monthly instalments.
- It does not require you to pay interest, which is the case in normal EMIs. It also does not include a processing fee usually.
- If you like to build a good credit history by opting for short-term loans, this can be a great choice.
- It can help you buy expensive products and improve your lifestyle.
While you can get many advantages from this, also keep an eye on the demerits while opting for no-cost EMIs on credit cards.
Disadvantages
- No-cost EMI may result in debt piling up if you do not use it sensibly.
- Many financial institution charge processing fees.
- You will need to pay GST on the payable amount.
- Failing to pay EMIs as per schedule can damage your credit score.
How Does No-Cost EMI on Credit Card Work?
To understand how no-cost EMI works, differentiating the working of regular EMIs from no-cost EMIs can be helpful. Let us assume:
In the case of typical EMIs, you will be charged a processing fee as well as interest by the seller. While the processing fee may range from 0.5% to 2%, the interest rate can be 8% to 15%. Now, if you buy a smartphone for Rs. 12,000 through normal standard EMI for six months, your payment breakup statement will be set like this:
- Term of EMI is 6 months
- Principal amount is Rs. 12,000
- Interest rate 12%
- Processing Fee is 2%
This way, each month, you have to pay Rs. 2,157. The interest will be Rs. 441, while the processing fee will be Rs. 250. So, you will be paying a total sum of Rs. 12691 for the item.
On the contrary, in a no-cost EMI scheme, you are not required to pay interest or processing fee on the items you purchase. So, for buying a smartphone worth Rs. 12,000 and 6 months of EMI tenure, you will be paying only Rs. 2000 every month.
Alternatively, you can opt for the Bajaj Finserv No Cost EMI Card. Although the functioning of EMI cards and credit cards is quite similar, the Bajaj Finserv EMI Network Card is only applicable for Bajaj partner stores, whereas a credit card is applicable far more extensively.
Check out the steps to apply for a Bajaj Finserv Insta EMI Card or Bajaj Finserv Network Card.
Here are all the advantages you can get from the EMI cards issued by Bajaj Finserv:
- No-Cost EMI Offers
Several partnered online stores provide no-cost EMI services on specific items if you buy them with your Bajaj Finserv EMI card. It will considerably lower your financial burden because you are not required to pay interest.
- Pre-Approved Loan Offers
The Bajaj Finserv Insta EMI Card offers a pre-approved loan facility up to the extent of Rs. 2 Lakhs. In addition, the Bajaj Finserv EMI Network Card allows you to avail of a pre-approved loan up to the extent of Rs. 4 Lakhs. Thus, having these cards can be highly supportive to take care of your funding crunch quickly and easily.
- Flexible Tenure
The card issuer enables you to opt for tenure between 3 and 24 months. So, you can choose a repayment term that suits you best while staying within your financial limitations.
- Zero Down Payment
Having a Bajaj Finserv EMI Network Card enables you to buy costly products at zero down payments and convert your bills into easy instalments, which you can clear from the following month onwards.
Now, you can understand why availing of no-cost EMI on credit cards is the best choice compared to regular EMIs. Knowing the benefits of no-cost EMI on credit cards, you can pick the one you need. Make sure to use your card sensibly to avoid debt burden.
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