Are No Cost EMIs really free?

No. While the merchant discounts the interest upfront, banks are required to charge GST (currently 18% in India) on the interest component of your EMI every month. You will also usually pay an upfront processing fee.

How is GST calculated on Credit Card EMI?

GST is charged only on the interest portion of your EMI, not the principal. As your principal decreases, the interest component decreases, and therefore the GST charged also decreases each month.

Credit Card EMI Calculator (No Cost EMI Tracker)

Analyze your credit card EMIs, processing fees, and hidden taxes. In No Cost EMIs, the merchant discounts the principal upfront so your total payments equal the product price. However, you still pay GST on the interest component every month.

The Truth About Credit Card EMIs

Converting a credit card purchase into an EMI breaks a large payment down into manageable monthly chunks. However, unlike standard term loans, credit card EMIs come with unique fees and tax implications that borrowers often miss.

What is a "No Cost EMI"?

In a No Cost EMI, the merchant offers an upfront discount equivalent to the total interest the bank will charge you. This means the principal loan amount given to the bank is lower than the product's price. When you add the bank's interest back in, the total base EMI equals exactly what the product originally cost.

The Hidden Costs: GST and Processing Fees

Processing Fees: Most banks charge a one-time processing fee (e.g., ₹199) on the first month's bill to set up the EMI.
GST on Interest: The government mandates an 18% Goods and Services Tax (GST) on banking services, which includes the interest component of your EMI. Because the interest portion decreases every month, your GST charge will be highest in the first month and slowly decline over the tenure.