Interactive tool

No-Cost EMI Truth Calculator — what it really costs you

See exactly who pays the interest, how much GST you cough up, and whether the instant discount would have served you better.

"No-Cost EMI" is the consumer-finance offer of the decade in India. Walk into any electronics store, e-commerce checkout or quick-commerce app and you can take a ₹60,000 phone home for "just ₹5,000 a month for 12 months — zero interest." It feels like the bank is lending you money for free.

It isn't. Banks never lend at 0%. The interest is very real — it's just been paid by someone else before you saw the price tag. And that's not the only invoice. Even on a no-cost EMI, you still pay GST on the (notional) interest, a processing fee plus GST on that, and you usually forfeit the instant discount you could have negotiated as a cash buyer. This calculator pulls all of that out into the open.

Punch in your scenario below. The math updates live, the breakdown is fully transparent, and the verdict tells you whether you're actually getting a deal or quietly paying more. For the long-form story behind the math, read No-cost EMI isn't free — here's who actually pays.

FLOW

Who pays whom

🧑

You

—

→ principal + gst + fee

🏦

Bank / NBFC

—

← subvention

🏬

Merchant

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In no-cost EMI, the bank still earns its full interest — the merchant pays it via subvention to win the sale. Net interest charged to you = 0. But GST on the interest, processing fees and the discount you forfeit are still real costs.

Disclaimer: figures are illustrative. Actual rates, processing fees and tenures vary by lender, merchant and RBI disclosure rules at the time of purchase. This tool is for education, not financial advice.

FAQ

Is no-cost EMI really free?No. The interest is real — it's just paid by the merchant upfront as a "subvention" instead of by you. On top of that, you still pay 18% GST on the notional interest, a processing fee plus 18% GST on it, and you usually lose any cash discount you'd have negotiated.Why am I charged GST on no-cost EMI?GST law treats the interest amount as a financial service, taxed at 18% — regardless of who funded it. So even though the merchant pays the interest, the GST is collected from you on every EMI installment.Who pays the interest in no-cost EMI?The merchant or brand pays it to the bank as a "subvention discount" — typically deducted from their margin on the product. The bank still earns full interest on the loan; you just don't see it on your statement.No-cost EMI vs instant discount — which is better?Compare the GST + processing fee against the discount on offer. If the instant discount is bigger than what no-cost EMI costs you in GST + fees + GST on fees, take the discount. The calculator above does this math for you.Does no-cost EMI affect my credit score?Yes — it's a loan reported to credit bureaus like any other. It also blocks your credit-card limit for the full purchase amount during the tenure, even though you're paying it off monthly.

Built by Shreyas Khare — payments & partnerships operator.

Your scenario

Who pays whom

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