Cash Discount vs No-Cost EMI: Diwali is a popular time to buy new things. People shop for home appliances, phones, cars and even gold. Stores and online shopping platforms offer discounts and easy payment plans to attract more customers. But not every offer saves money, even when it looks attractive.
Before buying an expensive item, customers should compare an instant cash discount with a no-cost EMI offer. The better option depends on the final price and the extra charges involved.
No-cost EMI allows customers to pay for a product in monthly instalments instead of paying the full amount at once. The seller or brand usually offers a discount to cover the interest charged by the bank. But customers may still have to pay processing fees, GST on applicable charges and other costs.
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Some stores also offer no-cost EMI only on the product’s MRP. This means buyers may lose a bigger festive discount available when they pay the full amount upfront.
A recent report by Financial Express gave an example of an ₹80,000 laptop bought through a nine-month no-cost EMI plan. The estimated GST on interest and processing fee could add around ₹1,150 to the cost. Actual charges depend on the bank and the offer.
So customers shouldn’t choose EMI only because the monthly payment looks affordable. They must check the total amount they’ll pay by the end of the plan.
An instant cash discount may be the better choice for people who can comfortably pay the full amount without using up their savings. It reduces the price at the time of purchase and may save more than an EMI offer.
No-cost EMI can still be useful for people who don’t want to spend a large amount at once. But they should check whether the offer applies to the discounted price and whether extra charges are involved.
Customers must also check bank conditions. Some offers are available only on selected cards or products. A small processing fee or tax can increase the final cost.
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Before choosing an offer, compare the upfront price with the total EMI payments. Check processing fees, applicable GST and whether you’ll lose any instant discount. Also read the rules for closing the EMI early, as some lenders may charge an extra fee.
Make sure the monthly instalment fits your budget, especially if you’re already paying other EMIs. Several small payments can add up and put pressure on your monthly income.
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