Zero-cost EMI schemes have taken the market by storm and almost every other seller and brand alike are offering this option on their products. It is one of those few schemes that has made it easier for customers to make high-value purchases without digging into their savings or paying exorbitant charges as interest on opting for a regular loan to get a product.
This is one of the primary reasons why consumers prefer and opt in for such schemes as it benefits them by allowing them to save money, and both retailers and brands can expect to hit higher sales figures.
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But, are zero cost EMI schemes really that great? Are they completely interest-free or there is a catch? If these questions have ever crossed your mind, then you are in right place, as we are going to discuss zero-cost EMI schemes in brief detail to help you understand how they work with cardless EMI, and the pros and cons of the scheme.
What is a Zero Cost EMI?
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A zero cost EMI offer essentially lets you buy a product or service at 0% interest in monthly installments over a period of time. Thus, the schemes allow customers to avoid paying high-interest charges and only pay the actual product cost. But whether they are actually zero cost is a thing of debate, since even though the customers don’t have to pay any interest charges, they do have to forgo any discounts or offers on the product as that benefit is passed on to the financing agency to cover for the cost of providing 0% interest to the consumer.
Benefits of Zero Cost EMI
There are numerous benefits that these schemes offer. Let’s have a look at a few of the top benefits you get when you opt to buy products at 0% interest.
Makes High-Value Purchases Affordable
Not everyone has the kind of money that’s needed to buy some of the latest products with all bells and whistles that modern technology has to offer. Zero-cost EMIs lets consumers make those high-value purchases without straining their finances. Unlike earlier, when consumer durable loans used to come with high-interest charges; zero cost EMI offers have made it considerably easier to purchase goods and services.
Available for Both Online and Offline Purchases
All major offline and online retailers offer this scheme, making it easier for consumers to purchase goods and services from their preferred stores.
Multiple Service Providers
There is no dearth of service providers offering zero-cost EMI loans to consumers these days, and some even club this scheme with others such as zero down payment schemes. This makes it even more lucrative since now consumers not only save on interest charges but on the upfront payment as well. Moreover, consumers can even opt for no cost EMI mobile on debit cards further expanding the scheme to people who lack a credit card.
Drawbacks of Zero Cost EMI
Like every other offer out there, even zero-cost EMIs also do have their drawbacks. Let’s have a look!
Promotes Impulse Buying
Since the lure of not having to pay any interest on a product is too much to ignore. Many times consumers end up buying things that they don’t need. This can lead to a debt trap if one is not careful, since people need to factor in the monthly EMIs that they would need to pay on a regular basis.
Loss on Returns and Refunds
In case a consumer doesn’t like a product, they have purchased, and want to return the product, they would still lose all the money that they have already paid in EMIs.
Not Available to All
Not all loan service providers offer this scheme to all. Generally, only those with a fairly good credit history can opt for this loan.
Zero Cost EMIs are great if you are financially disciplined and know what products you need without giving into impulse buying.
However, if you are someone who often makes rash decisions and ends up buying goods that they don’t really need, then this scheme is not for them.
All in all, they are great schemes that have allowed many to go beyond what their incomes would allow them to buy, leading to a better lifestyle without stretching their wallet!