New Delhi. The festive season has started in the country. During this time, different e-commerce companies and retail stores organize festive sales. In the sale, you get different types of offers on different products. Apart from this, different types of offers are also available on credit cards and debit cards of different banks. During this time, many banks provide the facility of No Cost EMI or Zero Cost EMI to their customers. Let us know what is No Cost EMI.

Zero-cost EMI or no-cost EMI means that if you have purchased any goods on credit, you will not have to pay any additional interest on the principal amount. You pay only the actual price of the goods in easy installments without any additional cost.

Interest is included in the price of the goods.
This sounds very good, but the bitter truth of the market is that nothing is available for free here. No-cost EMI also has a price in the market. In no-cost EMI, interest is indirectly included in the no-cost EMI by charging a higher price for the goods, so there is no extra charge for interest. According to experts, zero-cost EMI or no-cost EMI is nothing but a marketing gimmick. The interest on the loan is recovered from the customers in some other form.

The game of companies is
that even before offering no-cost EMI, the companies take a good discount on the product. For example, you are buying a mobile worth Rs 20,000 from a store. You avail the facility of no cost EMI and convert the amount of Rs 20,000 into EMI. In such a situation, you will feel that you are being charged the same price as the mobile. But the company would have already taken a discount on the price offered to you by the mobile manufacturing company. The store might have bought the mobile worth Rs 20,000 for Rs 15,000 or Rs 16,000. In such a situation, the store does not incur any loss even after offering no-cost EMI.

How is no-cost EMI calculated on credit cards?
If you buy any item on a no-cost EMI using a credit card, then the credit limit gets reduced by the amount of the price of the item. For example, you bought a TV for Rs. 18,000 on a no-cost EMI for 6 months. After making the purchase, the bill for that month will be prepared, and if your credit limit was Rs. 50 lakh earlier, then it will get reduced to Rs. 32,000. After paying every EMI, your credit limit will keep increasing by Rs. 3,000 each.