Zero1 by Zerodha · Transcript · · Updated
No-Cost EMI Is NOT Free! Here’s What You Actually Pay 💸🤯 – Transcript
Video by Zero1 by Zerodha · Watch the original on YouTube
Summary
AI-generated from the transcript. Verify details against the source video.
- No-cost EMI options involve interest that is paid for by the retailer rather than the buyer.
- Buyers still have to pay GST on the interest portion, a processing fee, and GST on that processing fee.
- Stopping an EMI midway incurs foreclosure charges, GST on foreclosure charges, remaining interest for that month, and GST on that interest.
Use this video with Pro
Reading, copying and transcript downloads are free. Create saved AI results for this video with a signed-in Pro account ($9/month).
Transcript
Search ignores accents. All transcript text stays visible.
Is a no-cost EMI actually free? Let me explain with an example. One lakh rupee phone adds 10% interest and you divide it by the number of months. In a no-cost option, you take the same one lakh phone divided by months, but there is no interest. The interest is actually still there, except it's paid for by the retailer. So, you don't have to pay it and they can sell more iPhones. When the phone is bought, the retailer will classify the amount as 91,000 something
goes to principal and the rest to interest. Now, although there is no interest, they still have to do this categorization. Your monthly payment comes out to 8,153 and the total sum is one lakh rupees, but there is GST you have to pay on the interest portion that they had classified. So, you have this new charge to it. Then, you'll be charged a processing fee and GST on that processing fee. So, in total, you've paid an extra of 1,702
rupees. However, there is one more hidden cost. In case you want to stop this EMI midway, there are four more charges you have to pay. One, you have to pay the foreclosure charges, GST on the foreclosure charges, you have to pay the rest of the interest for that month, and GST on that interest. However, there is one more charge that you guys are completely forgetting. That is this screen. The EMI of a few thousand rupees feels so much of EMI to pay that you
cannot pay it off completely because you don't have enough savings. The biggest curse you can have is having that credit card and the ability to buy something when you actually can't. Please remember, buying all these things will not give you the happiness you want. You don't want to get into a debt spiral. Follow for more.