Have you been delaying the purchase of a gadget that you’ve had your eyes on for months since you cannot currently afford it? The concept of a zero-interest EMI solves this problem for all customers who are in a similar position. Know more about zero-interest EMIs, their types, and their pros and cons in this article.

What is zero-interest EMI, and how do they work?

A zero-interest EMI (also called a “no-cost EMI”) is a category of equated monthly instalments that helps customers benefit from no interest charges during the repayment period. The customer can, therefore, finance a big purchase by repaying EMIs (with zero interest) over a fixed period. Banks might require customers to pay an upfront fee to benefit from a zero-interest EMI on their credit card, which can be paid as a lump sum while applying for the card.

Benefits of zero-interest EMI on credit cards:

Here are the key benefits of choosing the option of zero-interest EMIs on your credit card purchases –

• You aren’t required to pay while purchasing the product:The key benefit of zero-interest EMI offers on credit cards is that you can purchase an expensive product without bearing its expense at the time of purchasing it. 

• Paying via EMIs is stressfree:You need not repay the loan altogether and can split it in affordable EMIs. This reduces the stress of repayment on customers, thereby helping them access expensive products and services. 

• You can choose the repayment tenure of your choice:Most credit card companies allow customers to choose the repayment tenure of their choice. This further helps ease the overall stress on the customer purchasing the expensive product.

Disadvantages of zero-interest EMI on credit cards:

To get a balanced understanding of zero-interest EMIs, you must also know about the disadvantages of opting for this feature –

• Certain banks charge a non-refundable fee for providing this service:In certain cases, you might end up spending more money than you would have spent if you’d have purchased the product via cash. You must check if this fee charged by your bank is very high, and if that is the case, you must consider looking for another lender. 

• Failing to pay EMIs might impact your credit score:In the event of a failure to repay your credit card EMI, your credit score will be impacted immediately, thereby affecting your ability to avail loans.

Points to consider before opting for zero-interest EMIs:

Before choosing the zero-interest EMI option, you must read the terms and conditions imposed by the bank and mentioned in the credit card documentation. You should also make sure that you have the ability to repay credit card EMIs on time. Try to automate your EMI payments using your bank’s mobile banking app to avoid any late payment.

In conclusion, zero-interest EMIs can help customers purchase high-value products by paying for the product over a few months via fixed-income EMIs. You can avail this option to make the most of attractive features and rewards offered by credit cards.