Are you confused about what does no cost EMI mean and how does no cost EMI work? Here we help you understand what is the meaning of no cost EMI and understand how you can avail zero cost EMI.
EMI, which stands for equated monthly instalments, is a method of paying off an outstanding loan against a purchase. It involves a down payment against which the financier pays the remaining amount as loan, for a period, over an agreed rate of interest. The total amount to be repaid then includes the principal loan amount and the interest on the loan. This is equally divided and paid back in monthly instalments over a stipulated time frame. In this regard, what does no cost EMI mean?
While regular EMIs require you to pay the actual amount borrowed along with the interest accrued on that amount, No Cost EMI lets you pay only the principal amount borrowed. In other words, no cost EMI financing calculates your EMIs by dividing only the purchase price of the item by the length of the repayment tenure, without charging anything extra.
An RBI circular was released In September 2013, which prevented consumer loans and EMIs to be marketed by lenders at zero interest rate. Considering this, what is the meaning of no cost EMI? It means that if you opt for no cost EMI, the financier can either offer you a discount upfront against the interest component applicable or may offer you a deal which is inclusive of some discounts along with processing charges. The Bajaj Finserv EMI Network card, for example, gives you a discount on the product cost by deducting the interest from the price of the product. As a result, no cost EMI is also known as zero cost EMI.
Depending on the financier, the tenure varies for repaying the loan. The No Cost EMI facility from Bajaj Finserv, lets you divide the product price into convenient EMIs that can be spread over a tenure of 3, 6, 9, 12, 18, or 24 months, depending on your preference.
The no cost EMI facility can be availed by means of a debit or credit card that offers the feature or with an exclusive zero cost EMI card such as the Bajaj Finserv EMI Network card. The Bajaj Finserv EMI Network card can be used in any of the partner stores online. It can also be used to avail no cost EMI deal in any of the 84,200+ stores that it partners with over 1300 cities. The scheme allows you to shop for over one million products on equated monthly instalments (EMI) with no additional interest, down payment or processing fee. So, check out the Bajaj Finserv EMI Network card apply online process to start shopping in No Cost EMIs!