Our neighbour’s son, Daniel, is sixteen. Between coaching classes and tennis lessons, he dreams of cracking NEET. Like many teenagers, he also dreams of a MacBook. After weeks of online price checks and calculations, he finally convinced his mother to buy him one — worth over a lakh.
He was thrilled because it came with a “no-cost EMI” and an additional sixteen-thousand-rupee discount on a particular bank’s card. His mother was relieved, his father was proud, and the family saw it as a win-win.
But here’s the real question: what exactly is a no-cost EMI? And is it truly “no cost”?
E-commerce platforms make these schemes look irresistible, especially on mobiles, laptops, and gadgets that depreciate quickly. The psychology is simple — we are drawn to discounts, countdown timers, and the comfort of paying later. These are not accidents; they are carefully designed dark patterns meant to trigger impulsive buying.
The numbers are telling:
• One in four purchases during big sale days is on EMI.
• At peak traffic, 18,000 orders are processed per minute.
• Seven out of ten new customers come from tier-two and tier-three cities.
• Nine out of ten EMI buyers choose no-cost EMIs.
• Most purchases are mobiles, laptops, and consumer electronics.
So where’s the catch?
Let’s say you buy a laptop for Rs. 1,00,000 on no-cost EMI. On the lender’s books, it is structured as Rs. 80,000 principal + Rs. 20,000 interest. No credit institution lends without interest. What you don’t notice is this: GST is levied on the hidden interest component. In other words, you are paying tax on a cost you were told doesn’t exist.
The second trap lies in the tenure. Most no-cost EMIs run for 12 to 18 months. Longer tenures increase the chance of default. Miss even one EMI, and the “no cost” story unravels. Interest rates can jump to 40–50% on the balance, and your credit score takes a beating.
The lesson? Buy only what you need, when you need it. If you let e-commerce platforms decide for you, you will be led by impulse, not necessity. The glitter of a discount can blind you to the true cost of your purchase. The next time you see “no-cost EMI” flashing on your screen, pause and ask yourself: is it really no cost — or just a smarter way of making you pay?
Takeaway:
• No-cost EMIs aren’t truly “no cost” — hidden interest is built into the product price.
• You still pay GST on the interest component, even when it’s disguised.
• Longer EMI tenures = higher risk of missing a payment. One missed EMI can trigger interest rates of 40–50%.
• Your credit score can suffer badly if you default on even a single EMI.
• E-commerce platforms use dark patterns (timers, discounts, flashy banners) to push impulsive buying.
• Most no-cost EMI offers are on depreciating products like mobiles, laptops, and gadgets — assets that lose value quickly.
• Paying upfront is still the smartest option if you can afford it — no hidden costs, no traps.
• Best rule of thumb: Buy only what you need, not what a discount tempts you into.
Dipankar Jakharia
Guwahati
Wednesday, January 21, 2026