Knews Desk- “No-cost EMI” offers often attract customers while online shopping and buying electronics. This offer sounds very beneficial as it claims to pay in easy installments without interest. But financial experts say that sometimes such offers motivate people to spend more than necessary.
Actually, in no-cost EMI, the customer does not have to pay any separate interest, but in many cases the cost of interest is adjusted in the price of the product itself. Some companies recover their costs by removing discounts or adding processing fees. In such a situation, the customer does not feel that he is actually paying extra.
When EMI facility is available, people often buy more expensive products than their actual need and budget. Purchasing seems easy considering the low EMI, but running multiple EMIs simultaneously can increase the burden of monthly expenses. This may affect future savings and financial plans.
Another effect of EMI taken on credit card is that the available credit limit of the card decreases. If additional expenses are required in case of any emergency, the customer may face problems. Heavy interest and penalty may also be imposed on non-payment of installments on time.
Financial advisors say that before availing any no-cost EMI offer, one must compare the actual price of the product, the discounts available and other charges. This facility can prove useful if the purchase is necessary and the EMI is according to your income.
No-cost EMI is certainly a convenient option, but spending extra just because of the offer can put a strain on your financial condition. Therefore, it is very important to assess your needs and budget before purchasing.
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