The Hidden Dangers of Amazon Prime No Cost EMI

Amazon Prime No Cost EMI is a popular payment option that allows customers to buy products and pay in installments without any interest charges. But are there any hidden charges you should be aware of? Let’s explore the details to help you make an informed decision.

What is the Secret Behind Amazon Prime No Cost EMI?

Amazon Prime No Cost EMI may seem too good to be true. Retailers and banks work together to offer this scheme, with the retailer often covering the interest amount as a discount. This makes it appear as if there are no interest charges involved.

How Does Amazon Prime No Cost EMI Work?

1. Select the Product: Choose a product on Amazon that offers the No Cost EMI option.
2. Choose EMI Plan: During checkout, select an EMI plan ranging from 3 to 12 months.
3. Bank Approval: Your bank must approve the EMI plan, and you must have a credit card from a participating bank.
4. Installment Payments: The total cost of the product is divided into equal monthly payments over the chosen period.

Are There Hidden Charges on Amazon Prime No Cost EMI?

Although marketed as free of additional charges, some hidden costs may apply:

• Processing Fees: Some banks charge a processing fee for setting up the EMI, which is not covered by Amazon.
• GST on Interest: While the retailer covers the interest, you may still need to pay GST on the interest amount.
• Late Payment Fees: If you miss an EMI payment, you could incur late fees and interest charges.

What Happens if You Don’t Pay the EMI on Amazon?

Failing to pay your EMI could result in:

• Late Payment Fees: Substantial charges from the bank.
• Interest Charges: On the outstanding amount.
• Impact on Credit Score: Missing payments can negatively affect your CIBIL score, affecting your future credit options.

Disadvantages of Amazon Prime No Cost EMI

While this payment option has advantages, there are downsides:

• Limited Bank Participation: Not all banks offer Amazon Prime No Cost EMI.
• Processing Fees: As mentioned, some banks charge this fee.
• GST on Interest: Even if the interest is covered by the retailer, you may still need to pay GST.

Does Amazon Prime No Cost EMI Affect CIBIL Score?

Yes, your CIBIL score can be impacted. Timely payments can improve your score, but missed payments can lower it.

Why Is Interest Charged on No Cost EMI?

The interest is technically charged but is borne by the retailer, making it seem like there are no interest charges for the customer.

Conclusion

Amazon Prime No Cost EMI is a convenient way to make purchases without paying upfront. However, it’s important to be aware of hidden charges such as processing fees and GST on interest. Understanding these factors will help you avoid surprises and make better financial decisions.