AKG Money

Cash, no-cost EMI or EMI?

“No-cost” EMI still has an interest rate. The seller hides it in the price, but you pay 18% GST on it and a processing fee. See what each way of paying really costs.

These are example numbers. Change any of them to see your own answer.

The purchase

What you'd pay for it today, after any discount everyone gets.

₹

= ₹1 L

Some sellers knock off more if you don't take EMI. You give this up on EMI.

₹
The EMI offer
months

In the offer's fine print. Card EMIs are usually 13–24% a year, even on no-cost offers.

%

Before GST. 18% GST is added for you.

₹
Your savings

Money you don't pay today can keep earning. A savings account earns about 2.5–3.5%, an FD or liquid fund about 6.5–7%. Leave at 0 to ignore.

%
Pay in full

Paying in full is cheapest. No-cost EMI costs ₹1,702 more: 18% GST on ₹8,153 of interest hidden in the price, plus the processing fee. A normal EMI costs ₹10,710 more.

What each option really costs
ItemPay in fullCheapestNo-cost EMINormal EMI
Each monthOnce₹8,333₹9,073
Interest chargedHidden in the price on no-cost EMI—₹8,153₹8,877
18% GST on interest—₹1,468₹1,598
Processing fee with GST—₹235₹235
Discount given upNot in the total below: paying in full is already this much cheaper———
Total you pay₹1,00,000₹1,01,702₹1,10,710
Extra vs paying in full—₹1,702₹10,710
CheapestPay in full

How this is worked out

  1. Normal EMI: the bank lends you the price and charges interest every month. You also pay 18% GST on each month's interest, plus a processing fee with GST.
  2. No-cost EMI: your EMIs add up to the price. The bank books a smaller loan (the price minus the interest those EMIs carry) and the seller covers the difference. The interest is real, so 18% GST is charged on it.
  3. If a seller gives an extra discount only for paying in full, choosing EMI gives that up, so it's added to the EMI options.
  4. If you enter what your savings earn, every option is also valued in today's money: rupees you pay later are worth a little less, because they could earn interest until then.

Questions people ask

Is no-cost EMI really free?

Almost, but not quite. You pay 18% GST on the interest the bank charges behind the scenes, plus a processing fee and GST on it. On ₹1 lakh over 12 months at 16%, that's about ₹1,700.

When is no-cost EMI better than paying cash?

When the money you didn't spend stays in an FD, liquid fund or high-interest account and earns more than the GST and fee cost. If it just sits in a savings account, or gets spent, paying in full is usually cheaper.

Where do I find the interest rate on a no-cost offer?

In the offer details or the bank's charge slip after you buy. It's often 13–16% for cards. Your card statement will also show interest and GST lines each month.

Does EMI affect my credit score?

A card EMI blocks part of your credit limit until it's repaid, which raises how much of your limit you're using. Paying every EMI on time helps your score; missing one hurts it.

Is my data saved anywhere?

No. Everything is worked out in your browser. Your last numbers stay on your own device, and the page link holds them so you can share them.

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