Unlike their names, most Zero per cent schemes have other costs in built.
The biggest cost is that, your cash discount is forfeited which retailer would have given on cash payment, besides you pay some processing / or transaction fee and / or advance EMIs.
Thus paying much more…in the guise of 0%.
How do these work?
You plan to buy a LED television costing Rs. 1,00,000 for which if you pay cash, you get 10 % discount. If you go for 0 % scheme, you forgo the discount of Rs. 10,000. At an EMI of Rs. 16,666 for 6 months, you have to pay processing fee of Rs. 3,000. This means you end up paying Rs. 13,000 more for a LED TV which would have cost you Rs. 90,000.
A word of caution if you really want to go for this – Check if any fees or charges are there and if you pay full amount, do you get a discount that you are not getting if you go for 0% scheme. If answer to both the question is “No” then you have a true zero per cent scheme
Do not be under the impression that funding comes actually free, it has hidden costs involved.
No wondering why RBI is 100 % against these 0 % schemes!
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