{"id":185918,"date":"2023-11-13T05:27:23","date_gmt":"2023-11-13T05:27:23","guid":{"rendered":"https:\/\/indiansapidnews.com\/?p=185918"},"modified":"2023-11-13T05:27:23","modified_gmt":"2023-11-13T05:27:23","slug":"whats-better-no-cost-emi-or-bnpl","status":"publish","type":"post","link":"https:\/\/indiansapidnews.com\/celebrity\/whats-better-no-cost-emi-or-bnpl\/","title":{"rendered":"What’s Better? No-Cost EMI Or BNPL?"},"content":{"rendered":"

Ultimately, the choice between no-cost EMI and BNPL depends on an individual’s financial situation, preferences, and ability to manage repayments responsibly.<\/strong><\/p>\n

It is festival season, and many retailers are advertising various easy payment options — no-cost or zero-cost EMI (equated monthly instalment) schemes, buy now, pay later (BNPL), and so on.<\/p>\n

But are you sure you fully understand how these work?<\/p>\n

Before you avail of these attractive-looking options, there are a few things you should know about them.<\/p>\n

No-cost EMI<\/strong><\/p>\n

No-cost EMIs involve an interest subvention between merchants and issuers of payment modes, enabling EMI options for buyers at zero effective interest.<\/p>\n

Adhil Shetty, CEO, Bankbazaar, says: “They give customers a double advantage. They get to buy a product in instalments instead of making entire payment upfront. And they do not have to pay any additional interest for this.”<\/p>\n

For instance, if a customer purchases a TV set worth Rs 50,000 and opts for a repayment tenure of six months, they would have to pay a monthly instalment of Rs 8333.33 under the no-cost EMI option.<\/p>\n

So, the total cost over six months here is the same as full upfront payment.<\/p>\n

Note, however, that a no-cost EMI does not waive interest costs. This cost is borne by manufacturers and merchants instead of customers.<\/p>\n

In other words, they take a hit on their margins (which they hope to recover through higher volumes).<\/p>\n

Another important point to note is that you may, at times, not get certain discounts that you would have if you made upfront payment — cash, after all, is still king.<\/p>\n

In some cases, a customer availing of a no-cost EMI loses out on some benefits. Sometimes the interest cost is added to the price and the customer is required to pay this higher amount in six instalments.<\/p>\n

Non-cost EMI: Pros and cons<\/strong><\/p>\n

One primary advantage of a no-cost EMI is that it enhances people’s convenience. It enables cost-effective purchase of high-value items, with predictable fixed monthly payments.<\/p>\n

Bankbazaar’s Shetty adds: “Some of the offers tied to no-cost EMIs may reduce the cost of purchase.<\/p>\n

“Second, it will also allow you to stagger payments so that your regular expenses are not stressed due to a large purchase, making it easier for you to plan purchases.”<\/p>\n

Moreover, it can also be used to make emergency purchases without upsetting your monthly budget.<\/p>\n

As for cons, Gaurav Chopra, founder & CEO of IndiaLends, says: “No-cost EMI is not universally available, and some options may include processing fees. An important thing to mention here is that making timely payments is crucial to avoid penalties and protect your credit score.”<\/p>\n

Things to keep in mind<\/strong><\/p>\n

Understand the terms and conditions of the EMI offer. Make sure there are no additional or hidden charges.<\/p>\n

Raoul Kapoor, Co-CEO, Andromeda Sales and Distribution, says: “Check if the product you want to purchase is eligible for a no-cost EMI. Ensure you have the necessary credit approval or a compatible credit card.”<\/p>\n