What's the catch with 0% interest EMIs?

[ChurningNoob]

I need to make my tuition fee payment every 6 months and there is an option to choose Zest payment which offers 0% interest rate on the fee.

I have never taken or used such apps or sites for no cost EMIs so I am wondering what is the catch here? Is there anything I should be aware of? Zest will return the interest in the form of cashback.

Is it better to pay with Zest or just used my savings to pay the fee?

 

[ashwink]

I need to make my tuition fee payment every 6 months and there is an option to choose Zest payment which offers 0% interest rate on the fee.

I have never taken or used such apps or sites for no cost EMIs so I am wondering what is the catch here? Is there anything I should be aware of? Zest will return the interest in the form of cashback.

Is it better to pay with Zest or just used my savings to pay the fee?

I suggest you to pay with your savings it's possible

 

[ashwink]

Atleast not with BNPLs ...

Exactly

 

[talkwithfino]

I have used HDFC no cost previously and thwy are safe

Even Bajaj is not safe ... They do weird stuff (confirmed by multiple people) ... Hence I keep saying that a relationship with HDFC always helps ... They are not problematic like Axis/ICICI

But.....they do charge processing fees right...? My brother had once purchased a phone on no cost emi... he was charged processing fees for it by Hdfc (Millenia Debit Card)

 

[ChurningNoob]

Atleast not with BNPLs ...

Is BNPL same as 0% EMI? Mine is Zest

 

[ChurningNoob]

Atleast not with BNPLs ...

Is BNPL same as 0% EMI? Mine is Zest

But.....they do charge processing fees right...? My brother had once purchased a phone on no cost emi... he was charged processing fees for it by Hdfc (Millenia Debit Card)

They say no processing fee too. https://www.zestmoney.in/faqs/meaning-of-no-cost-emi/

 

[Souvik]

BNPL is an unsecured loan, also reflects on CIBIL, so better to stay away.

 

[BankExpertIndia]

Never Risk Your Life With BNPL

 

[ChurningNoob]

Yes ... Puts Cibil in risk which itself is a huge thing if not anything worse like extra huddle charges etc.

I did not know this, thanks. Will stay away.

 

[007]

I need to make my tuition fee payment every 6 months and there is an option to choose Zest payment which offers 0% interest rate on the fee.

I have never taken or used such apps or sites for no cost EMIs so I am wondering what is the catch here? Is there anything I should be aware of? Zest will return the interest in the form of cashback.

Is it better to pay with Zest or just used my savings to pay the fee?

I would suggest you not to get into the EMI trap (0% or whatever), only avail the products/services which you can actually pay for. Follow the same strategy for CCs too (secured/unsecured), and you will thank me later! 😬

 

[ChurningNoob]

I would suggest you not to get into the EMI trap (0% or whatever), only avail the products/services which you can actually pay for. Follow the same strategy for CCs too (secured/unsecured), and you will thank me later! 😬

Thanks, actually it is not that I cannot afford it. Just would have to use it from my savings so I thought if BNPL actually helps I could keep that investments for longer period. Time to break my investments/.

 

[007]

Thanks, actually it is not that I cannot afford it. Just would have to use it from my savings so I thought if BNPL actually helps I could keep that investments for longer period. Time to break my investments/.

You saved that money to use when in need, right? 👀 This is the right time I believe.
But if you think that you shouldn't use your savings and you see other benefits or in some sort of emergency/urgency which I can't comprehend please go ahead and use BNPL!

 

[Rohit75]

Never Risk Your Life With BNPL

I have two Simpl BNPL accounts. No cibil reporting. They don't even know my Pan no also.

 

[Cierdo]

You can opt for the EMI option, just keep in mind these things:
1. Processing fee: If you're comfortable with it, fine. (Your case has nil processing fee, so this is fine)
2. Time of conversion: If the EMI is done on the first day of your billing cycle, the first instalment is charged on the the last day. Hence, you need to time the conversion to EMI in order to minimise the first month interest.
3. Banks/BNPL companies refunds the interest in the form of cashback, however, you do have to pay the GST on interest from your pocket. So in case you're getting 5000 as the 0% interest cashback, you'll have to pay 900 rupees in total, in addition to whatever you pay. Seems trivial, but your call.

 

[BankExpertIndia]

I have two Simpl BNPL accounts. No cibil reporting. They don't even know my Pan no also.

When I Wrote That Message I Was Talking About Slice / LazyPay / KreditBee / Uni / ETC... Who Loads Loan Limit Into Cards.

 

[Rohit75]

When I Wrote That Message I Was Talking About Slice / LazyPay / KreditBee / Uni / ETC... Who Loads Loan Limit Into Cards.

Lazypay is the worst among all. They charged 42% annual interest over dues and forcefully convert all transactions into 12 months emi.

Even there is no options to pay partial.

 

[AsB]

In most cases, EMIs come with GST as well. So, you pay 18% extra with every EMI. Also, as some people say , processing fee.
While most banks have that fee ranging from Rs 99/- to 199/-, Axis Bank charges 1% of the transaction value

 

[Digvijay]

Nothing is zero cost really. It could have been a win-win if there were no processing fees and no GST. You should decide if you’re fine with the interest rate you’re being charged.

 

[Momo_Scooby]

But.....they do charge processing fees right...? My brother had once purchased a phone on no cost emi... he was charged processing fees for it by Hdfc (Millenia Debit Card)

As they charge processing fee and also you have to pay GST on your interest component from your pocket it will not be part of any 0% interest emi offer

 

[bugmenot]

How a Zero Cost EMI Actually Costs 9% - Capitalmind

You've heard of the zero-cost EMI, no? You have to buy something, and instead of paying for it now, you just pay for it over 6 months. That's awesome, correct? But it turns out there's something more sinister now. From a zero cost EMI, you are likely to be paying…

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