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Guide

Consumer Durable & No-Cost EMI

No-cost EMI is not free. The interest is recovered either by withholding the cash discount you would otherwise have received, or by inflating the sticker price — and on top of that, GST is charged on the notional interest component.

What "no-cost EMI" actually costs
The forgone discount + 18% GST

On the notional interest, plus any processing fee.

as of 2026-08-17· Credsir analysis of standard no-cost EMI structuresreported

Ask one question at the counter: what is the price if I pay outright, today?

By Nishit Kumar, Founder & Editor
Updated 17 August 2026

What to know

A worked case makes it concrete. A ₹60,000 phone offered at ₹57,000 for an upfront payment, or ₹60,000 across six no-cost EMIs, means the credit costs ₹3,000 for six months on ₹60,000 — an effective annualised rate in the high teens, before any processing fee. The scheme is not a scam, but it is a loan, and it should be compared as one.

The GST point is the one almost nobody knows. Where the bank charges interest and the merchant reimburses it as a discount, GST can still apply to the interest component and appear on your card statement. It is small in rupees and it is the clearest evidence that "no cost" is a description of the marketing rather than of the transaction.

Your numbers

₹50 L
₹10,000₹50,00,000₹20 Cr
18.5%36
120 years30
Monthly EMI
₹43,391
  • Principal48%
  • Interest52%
Principal
₹50,00,000
Total interest
₹54,13,879
Total payable
₹1,04,13,879
Interest as % of principal
108.28%
Growth over time
₹0₹27.3 L₹54.7 L₹82 L₹1.09 CrYr 1Yr 4Yr 7Yr 10Yr 13Yr 16Yr 19Yr 20
ValueAmount you put in

What this means.Over 20 years you repay more in interest than you borrowed. Cutting the tenure or prepaying early changes this sharply.

View the full breakdown (20 rows) →
YearPrincipal paidInterest paidBalance
1₹99,511₹4,21,182₹49,00,489
2₹1,08,307₹4,12,387₹47,92,181
3₹1,17,881₹4,02,813₹46,74,300
4₹1,28,300₹3,92,394₹45,46,000
5₹1,39,641₹3,81,053₹44,06,359
6₹1,51,984₹3,68,710₹42,54,375
7₹1,65,418₹3,55,276₹40,88,957
8₹1,80,039₹3,40,655₹39,08,918
9₹1,95,953₹3,24,741₹37,12,965
10₹2,13,274₹3,07,420₹34,99,691
11₹2,32,125₹2,88,569₹32,67,566
12₹2,52,643₹2,68,051₹30,14,923
13₹2,74,974₹2,45,720₹27,39,949
14₹2,99,279₹2,21,415₹24,40,670
15₹3,25,733₹1,94,961₹21,14,937
16₹3,54,525₹1,66,169₹17,60,412
17₹3,85,862₹1,34,832₹13,74,550
18₹4,19,968₹1,00,726₹9,54,582
19₹4,57,090₹63,604₹4,97,492
20₹4,97,492₹23,202₹0

At ₹50,00,000 over 20 years, Bank of Baroda holds the lowest advertised floor on our board.

Only these figures travel with you.

See Bank of Baroda’s terms

Questions

Is no-cost EMI really free?

No. The interest is recovered through a forgone discount or a higher price, and GST is typically charged on the notional interest. Ask what the price would be for an immediate outright payment — the difference is what the credit costs you.

Does no-cost EMI affect my credit card limit?

Yes. The full purchase amount is usually blocked against your available limit for the tenure, not just the monthly instalment. That can matter if you are close to your limit, because it raises your utilisation ratio.

Can I foreclose a no-cost EMI?

Usually, with a foreclosure charge, and you generally do not recover the discount that was forgone at purchase. Check the terms before converting a purchase to EMI.

Related reading

Worth knowing.Rates, fees and terms change frequently and vary by applicant. Everything here is general information, not personalised advice. Confirm the current terms directly with the institution before you apply. How we research and rate.