No-cost EMI true cost calculator
On a no-cost EMI the seller pays the bank's interest for you, but you still pay 18% GST on that interest, usually a processing fee, and sometimes a discount you could have had by paying in full. Enter an offer to see the real cost in rupees.
Enter the EMI offer
Month-by-month statement
| Month | Interest (₹) | Principal (₹) | GST on interest (₹) | You pay (₹) |
|---|
How no-cost EMI works
Banks charge their normal EMI interest, typically 13% to 16% a year on cards. To make the offer "no cost", the seller or brand gives you an upfront discount equal to that interest. The bank lends you the discounted amount, and the EMIs add up to the original price. The interest cancels out; the tax on it does not.
A worked example
A ₹60,000 phone on 6 months, at a 15% bank rate with a ₹199 processing fee:
| Item | Amount |
|---|---|
| Seller's discount (the interest) | ₹2,539.90 |
| Amount the bank lends | ₹57,460.10 |
| EMI | ₹10,000 |
| 18% GST on the interest | ₹457.18 |
| Processing fee + GST | ₹234.82 |
| Real extra cost | ₹692 (about 4% a year) |
If the same sale offers ₹3,000 off for paying in full, choosing EMI costs ₹3,692 instead, which is about 22% a year.
Cost by tenure
Same ₹60,000 phone, 15% bank rate, ₹199 fee:
| Tenure | EMI | GST you pay | Total extra | Yearly cost |
|---|---|---|---|---|
| 3 months | ₹20,000 | ₹264 | ₹499 | 5.0% |
| 6 months | ₹10,000 | ₹457 | ₹692 | 4.0% |
| 9 months | ₹6,667 | ₹645 | ₹880 | 3.5% |
| 12 months | ₹5,000 | ₹829 | ₹1,063 | 3.3% |
Longer tenures cost more rupees (more interest to tax) but a lower yearly rate (the fixed fee is spread over more months).
How the calculator works
It finds the loan amount whose standard reducing-balance EMI at the bank's rate equals price ÷ months; the gap between that and the price is the seller's discount. It then runs the loan month by month, adding 18% GST to each month's interest, and adds the processing fee with GST to the first statement. The yearly cost is the interest rate at which the upfront price (minus any discount you gave up) equals everything you pay over the tenure. The EMI formula itself is explained in our worked EMI example.
Questions people ask
Is no-cost EMI really interest-free?
No. The bank charges interest; the seller pays it through a discount. In 2013 the RBI said "the very concept of zero percent interest is non-existent", which is why the schemes are built this way.
Why is there GST on a no-cost EMI?
Interest on a credit card EMI is a financial service that attracts 18% GST. The discount covers the interest, not the tax on it, so the GST shows up on each month's statement.
Can I avoid the processing fee?
Some banks waive it during sales, and some don't charge one at all. Set the fee to 0 to see the cost without it. Check the offer terms on the checkout page.
What if I close the EMI early or return the product?
Early closure can carry a fee and the discount may be taken back. On a return, the processing fee and GST already billed are usually not refunded.
What is the biggest risk?
Paying only the minimum due on your card bill. The unpaid balance then attracts revolving interest of around 3% to 3.75% a month, which wipes out every saving here. See the minimum due trap.
For the full explanation, read No-cost EMI explained: what a ₹60,000 phone really costs on 6 months.
Assumes a reducing-balance card EMI, 18% GST on interest and fees, and the fee billed in the first month. Your bank's rate, fee and billing may differ; the offer terms and your card statement are the final word. This calculator is for education and estimates only.