What Is No-Cost EMI? Definition, Benefits, Eligibility, How It Works?
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  • Personal
  • Business
  • Corporate
  • Private Banking
  • Privy League
  • NRI Services
  • Investors

If you've ever done online shopping, you might probably know what no cost EMI means. Especially when you're making a significant purchase but want to avoid the immediate financial hit, this option is a saviour.

You can pick up that expensive appliance or gadget and split the price into manageable payments, without the worry of interest piling up. This concept has changed how we approach big-ticket items, making them more accessible. But what exactly is 'No Cost EMI', and how does it fit into your financial planning? Read on as we explore what this means in practical terms.

What is No Cost EMI?

No Cost EMI provides extra cushion while shopping. Essentially, it breaks up the price of your purchase into equal monthly instalments without paying extra interest. It's all about making those bigger buys less daunting for your wallet. So, whether it's that latest smartphone or an expensive new fridge, no-cost EMI makes it easier to manage your finances while you enjoy your purchase right away.

How Does No Cost EMI Work

Traditionally, EMIs include an interest component. However, in a no-cost EMI scheme, this interest is effectively waived off. The discount provided by the seller is equivalent to the interest you would have paid. Therefore, you only pay the actual price of the product, making it an efficient option.

Pros and Cons of No-Cost EMI

While No-cost EMI is an attractive option, it's essential to understand its various aspects.

Aspect Pros Cons
Financial Implications Interest-Free Payments: No Cost EMI schemes do not add any interest on the instalment amounts, making your purchases more economical. You pay exactly what the product is worth, with no extra charges disguised as interest.  Variable Product Selection: There could be limited products available under the No Cost EMI scheme. Not all products or brands might offer this facility, which could restrict your choices when shopping.
Budgeting and Spending Better Budget Management: By splitting the cost of a purchase into equal monthly instalments, No-cost EMI aids in managing your monthly budget. It allows for better cash flow management, as you don't have to pay a large sum upfront. Terms and Conditions: There are often specific terms and conditions attached to No Cost EMI offers, such as minimum purchase requirements or validity on certain products. These terms can affect the overall benefit and flexibility of the scheme.
Credit Implications Credit Score Improvement: Regular and timely payments of No Cost EMI can positively impact your credit score. It reflects good credit management and can improve your eligibility for future credit products. Credit Limit Utilisation: Using No Cost EMI utilises a portion of your available credit limit. This could impact your credit utilisation ratio and might affect your ability to take on additional credit until the amount is fully repaid.

Features & Benefits of No Cost EMI Card

The no-cost EMI card is packed with features that make it an attractive choice for consumers. It's incredibly versatile, allowing you to make various purchases, big or small, without feeling the pinch right away.

  • Versatility in Shopping: It allows many purchases without the immediate financial burden.
  • Budget-Friendly: The repayment is broken down into manageable monthly instalments.
  • Positive Credit Impact: Timely repayment can contribute positively to your credit score.

Eligibility Criteria for the Insta EMI Loan

Live a no compromise life, with Kotak Smart EMI. You can get everything on EMI with easy instalments of 3, 6, 9, and 12 months. It lets you purchase things and pay in simple instalments. Thinking about going through a Kotak smart EMI Loan? Here's what you need to know.

  • Credit History: A good credit history is necessary.
  • Stable Income: A consistent source of income is required to ensure repayment capability.
  • Age and Employment: For consumer durables, you should be between 21 and 65 years old. For digital products, the age limit is slightly higher, between 23 and 65 years.
  • Nationality: The applicant must be an Indian National.
  • Income Source: You should be -
    • Salaried, whether in private or government sectors.
    • Self-employed
    • Pensioner or a
    • Business owner
  • Residence Area: The customer’s current residence should be in the same city as the store from where the product is being purchased, particularly for in-store transactions.


Comparing EMI and No Cost EMI side by side clarifies their differences

Difference Between EMI And No Cost EMI

Criteria EMI No Cost EMI
Interest Applied Not Applied
Total Cost Product Price + Interest Product Price Only
Payment Monthly amount includes interest Monthly amount is interest-free

How to Apply for Kotak No Cost EMI

Kotak believes in convenience and the following methods provide a quick, convenient, and digital way to enjoy the benefits of Smart EMI with minimal paperwork and instant approvals.

  1. Instant In-Store EMI
    • Walk into a partner store and select your product.
    • Enquire about Kotak Smart EMI options.
    • Complete the digital loan application.
    • Opt for regular or biometric KYC.
    • Make the down payment, and the product is yours.
  2. Debit Card EMI
    • Text DCEMI along with the last 4 digits of your Kotak Debit Card number to 5676788 to know your pre-approved limit.
    • Select your product at a store.
    • Choose Kotak Debit Card EMI at the Point of Sale.
    • Pick an EMI tenure, swipe your card, enter your PIN, and complete the transaction.
    • Also available for online shopping on platforms like Amazon.
  3. Smart EMI Card
    • Use at merchant outlets or online.
    • For in-store purchases: Swipe your Smart EMI Card, enter the PIN, and complete the transaction.
    • For online shopping: Add items to the cart, enter your Smart EMI Card details and OTP, and complete the transaction.

Key Considerations When Selecting No-Cost EMI Options

When selecting a No-Cost EMI option, it's important to carefully consider several key factors to ensure it aligns with your needs and financial situation.

  • Terms of the Offer: Understand all conditions attached to the no-cost EMI.
  • Product Eligibility: Ensure the product you want is eligible for no-cost EMI.
  • Repayment Plan: Make sure the repayment plan fits comfortably within your budget.


Read also: what is superannuation


FAQs About NO Cost EMI

1. What does no-cost EMI mean?

No-cost EMI lets you purchase items by dividing the total cost into monthly instalments without adding interest. It makes buying big-ticket items more manageable.

2. Where can I use the Insta EMI Card?

You can use the Insta EMI Card at various places, including numerous retail stores and online shopping websites, making it a versatile payment option.

3. Can we get EMI on a Debit Card?

Yes, many banks, including Kotak Mahindra Bank, now offer EMI options on debit card purchases, allowing you to convert your high-value transactions into easy monthly payments.

4. What differentiates a 'No Cost EMI Card' from regular EMI cards?

A no-cost EMI Card stands out because it eliminates the extra interest charges typically associated with regular EMI cards, making purchases more cost-effective.

5. How much GST is charged on no-cost EMI?

GST on no-cost EMI transactions is charged only on the product's actual price and is unaffected by the EMI arrangement, ensuring no extra tax burden.

Summing Up

No Cost EMI is an excellent way to make big purchases more manageable and budget-friendly. Whether it's for managing your budget more effectively or making those dream purchases without feeling the pinch, No Cost EMI offers a smart solution.

Understanding its features and how it works can help you make the most out of this financial option. Always remember to check the terms and conditions to ensure it aligns with your financial planning.

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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.