What Is No Cost EMI & How It Works (2025 Guide)

Published: 14 November 2025

It begins with a simple wish: to upgrade your phone, buy a washing machine for your parents, or get that laptop you have been eyeing for months. But the only thing standing in the way is the price tag. Well, there is a solution to this problem, and that is called No cost EMI! No cost EMI has emerged as a bridge between aspiration and affordability. It allows you to purchase what you desire without draining your savings or paying any additional interest. It has become one of the most popular financing options across India, especially in today’s digital times. In this blog, we will break down what does no cost EMI mean, how no cost EMI works, and why it is changing the way people manage their spending in 2025. So keep reading to know everything about it!

What Is No Cost EMI?

No Cost EMI meaning: It is a financing option that allows you to buy a product now and pay for it in instalments, without paying any extra interest on the total price.

In a regular EMI, you pay both the principal amount and the interest. In a No Cost EMI, the interest is adjusted in such a way that you pay only the product’s actual price.

For example:
If a phone costs ₹30,000, and you choose a 6-month No Cost EMI plan, you will pay ₹5,000 every month for 6 months. The total remains ₹30,000, not ₹31,500 or more as in a regular EMI.

This is what makes No Cost EMI a popular choice for shoppers in 2025.

How Does No Cost EMI Work?

The concept behind how no cost EMI works is simple, but the calculation involves a few adjustments between the seller, bank, and finance company.

Here’s how it usually happens:

The seller or brand gives a discount equal to the interest amount.
The bank or finance partner charges interest on the loan, but it is offset by the discount provided.
As a result, you pay the same total amount as the product’s original price.

Example:
If the interest for a 6-month EMI is ₹1,200, the seller offers a discount of ₹1,200. So your effective payment remains the same as the original product cost.

This model is used by platforms like Bajaj Finserv, Amazon, Flipkart, and our no cost EMI loan app like My Mudra, which offers seamless No Cost EMI options both online and offline.

Pros and Cons of No Cost EMI

Now that you are clear with what is the meaning of no cost EMI, let us understand its benefits and limitations too:

Pros	Cons
No extra interest, total payment equals product price.	Available mostly on selected products or categories.
Helps manage big purchases without burdening monthly budgets.	Processing fees may apply with some banks.
Makes high-end items like mobiles, laptops, and appliances affordable.	Cancellation may lead to loss of interest benefit.
Convenient repayment through monthly instalments.	Limited tenure options (usually 3, 6, or 9 months).
Improves credit score when payments are timely.	Credit card or specific finance partner often required.
Promotes financial discipline and planned spending.	Hidden charges may exist if terms are unclear.
Easy availability through platforms like Bajaj Finserv and My Mudra.	Early closure may not always be allowed.
Suitable for both online and offline purchases.	Not truly “zero cost” if seller inflates product price.

When Should You Consider No Cost EMI?

Consider using a No Cost EMI loan in these situations:

When buying high-value items such as electronics, furniture, or gadgets.
If you want to avoid breaking your savings for one-time payments.
When offers are available on trusted platforms that disclose all charges clearly.
If you can commit to on-time repayments to maintain your credit score.

For instance, using My Mudra’s No Cost EMI loan option for a new smartphone can be ideal if you want instant approval with minimum documentation.

No Cost EMI vs Regular EMI: What Is the Difference?

Let us understand the difference between zero cost EMI and regular EMI:

Feature	No Cost EMI	Regular EMI
Interest Rate	Zero or adjusted by discount	Charged on product price
Total Cost	Equal to actual product price	Higher than product price
Eligibility	Selected banks or partners	Available for most cards and loans
Processing Fee	Sometimes applicable	Usually applicable
Repayment Tenure	3–9 months (limited)	3–24 months (flexible)
Ideal For	Short-term purchases	Long-term financing
Who Bears Interest	Seller or finance company	Customer
Example	₹30,000 phone = ₹30,000 total	₹30,000 phone = ₹31,500+ total

Who Is Eligible for No Cost EMI?

Eligibility varies depending on the lender or platform. Generally, you are eligible if you:

Own a credit card or debit card from a partner bank.
Have a stable income and good repayment history.
Are an Indian resident above 18 years of age.
Purchase products listed under the No Cost EMI offer.

At My Mudra, we help you get No Cost EMI personal loans without needing a credit card.

Also Read: How to Pay Personal Loan EMI with a Credit Card in 2025

Top Platforms Offering No Cost EMI in India

If you are planning to try No Cost EMI in 2025–2026, here are some trusted options:

Platform / Partner	Type	Key Features
Bajaj Finserv	Finance Company	Offers No Cost EMI on thousands of products through its EMI Network Card.
Amazon	E-commerce Platform	Regular No Cost EMI offers on mobiles, electronics, and more via partner banks.
Flipkart	E-commerce Platform	Provides flexible No Cost EMI plans during major sales and festivals.
HDFC Bank	Bank	Credit and debit card EMI options with 0% interest at partner stores.
ICICI Bank	Bank	Offers No Cost EMI on online and offline purchases with selected merchants.
Croma	Retail Chain	Easy No Cost EMI on electronics and home appliances with top banks.

Conclusion

Financial comfort often lies not in how much we earn, but in how wisely we spend it! No cost EMI lets you enjoy your purchases without heavy payments. It is the simplest way to manage money without compromise.

For a fast, reliable, and transparent experience, explore My Mudra’s instant loan and EMI options. With quick approval, fair terms, and total transparency, My Mudra ensures that your financial plans stay steady while your life cycle grows freely.

Also Read:
- Missed A Personal Loan EMI – What Should You Do?
- How to Increase CIBIL Score from 600 to 750 in India

Frequently Asked Questions

What is meant by No Cost EMI and how is it calculated? +

It is an instalment plan where the interest charged by the lender is compensated by a discount from the seller. You end up paying only the original product cost in monthly instalments.

Is No Cost EMI truly free or are there hidden charges? +

It is usually free of additional interest, but some banks may charge processing or convenience fees. Always review the offer details before buying.

Can I get a No Cost EMI on personal loans or only for purchases? +

Yes, many lenders, including My Mudra, offer No Cost EMI personal loans for selected customers, not just for product purchases.

Which apps offer instant No Cost EMI options in India? +

Popular apps include My Mudra, Bajaj Finserv, Amazon Pay Later, and Flipkart Pay Later, which make applying for No Cost EMI simple and paperless.

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Anjali Singh Assistant Manager

Hey there, I'm Anjali Singh. With over 6 years of experience in finance, I specialize in creating content on banking, loans, and financial planning. My goal is to simplify complex financial topics and help readers make informed decisions through my articles.