No-cost EMI calculator
Free, no sign-up · Facts checked 18 Oct 2026
What a "no-cost EMI" really costs: GST on interest, fees, lost discounts.
Work it out
Real extra cost
₹692
₹10,000 × 6 months · 1.15% of the price
A ₹60,000 purchase on a 6-month “no-cost” EMI (₹10,000 a month) really costs ₹692 more than paying in full: about 1.15% of the price.
- EMI
- ₹10,000
- GST on interest
- ₹457
- Fee with GST
- ₹235
- Total you pay
- ₹60,692
A 3-month EMI would cost ₹193 less. Shorter is cheaper.
What it is made of
Point at a part to see it on its own.
From your numbers
Worked out from what you entered. Try one.
- A 3-month EMI instead of 6 would cost ₹193 less in GST.
- Ask for a fee waiver: many cards drop it on request, saving ₹235.
- Your cash can earn while you pay EMIs. See whether an FD makes the EMI come out ahead.
Milestones
Which costs least
What each way costs on top of paying in full.
Regular EMI: the same card rate without the seller’s discount.
Extra cost by length
The same purchase spread over each EMI length.
Month by month, as on your statement
Always open, in full.
| Month | EMI | Interest | GST on it | Principal | Left to pay |
|---|---|---|---|---|---|
| Month 1 | ₹10,000 | ₹718 | ₹129 | ₹9,282 | ₹48,178 |
| Month 2 | ₹10,000 | ₹602 | ₹108 | ₹9,398 | ₹38,781 |
| Month 3 | ₹10,000 | ₹485 | ₹87 | ₹9,515 | ₹29,265 |
| Month 4 | ₹10,000 | ₹366 | ₹66 | ₹9,634 | ₹19,631 |
| Month 5 | ₹10,000 | ₹245 | ₹44 | ₹9,755 | ₹9,877 |
| Month 6 | ₹10,000 | ₹123 | ₹22 | ₹9,877 | ₹0 |
Full breakdown
- EMI
- ₹10,000
- GST on interest
- ₹457
- Fee with GST
- ₹235
- Total you pay
- ₹60,692
- Interest the seller pays
- ₹2,540
- Hidden cost a year
- 4%
Guide
What a no-cost EMI really is
A no-cost EMI is an ordinary loan on your credit card where someone else pays the interest. The bank charges its usual EMI interest. The seller or the brand gives you an upfront discount of the same amount, so your instalments add up to exactly the price. That is why the EMI is simply the price divided by the number of months.
The interest does not disappear. It is still charged, month by month, and it shows on your card statement. Because of that, you still pay 18% GST on the interest part of every EMI, and most cards also charge a processing fee with GST on top. If the shop would have given you a cash or card discount for paying in full, choosing EMI gives that up too. This calculator adds all of it.
In September 2013 the Reserve Bank of India told banks that "zero per cent interest" offers on card purchases were misleading, because the interest was being built into the price (circular RBI/2013-14/292, 17 September 2013). Today's no-cost EMIs work differently: the interest is shown and then cancelled by a discount. Card issuers' merchant EMI terms (for example IDFC First Bank's, as of October 2026) say that GST on interest and the processing fee are still payable by you.
How to use this tool
- Type the price on the bill and pick the number of months.
- Type your card's EMI interest rate. Most Indian cards charge about 13–16% a year on EMIs.
- Add the processing fee, and any discount you would get only by paying in full.
- Leave 18% GST on in India.
- Turn on Keep my cash to see whether keeping your money in a savings account or FD, and paying the EMIs from it, comes out ahead.
- Turn on Close early to see what paying off the EMI before the last month may cost.
Priya's phone
Priya teaches at a school in Kallakurichi. She wants a ₹60,000 phone and the shop offers a 6-month no-cost EMI on her card, which charges 15% a year on EMIs and a ₹199 fee.
| Part of the cost | Amount |
|---|---|
| Her EMI | ₹10,000 a month |
| Interest the seller pays for her | about ₹2,540 |
| GST on that interest | ₹457 |
| Fee with GST | ₹235 |
| Real extra cost | ₹692 |
So her "no-cost" phone costs about ₹692 more than paying in full, a little over 1% of the price. If the shop had offered ₹3,000 off for full payment, the real extra cost would be ₹3,692, and paying in full would clearly win.
When it is worth it
A no-cost EMI makes sense when there is no discount for paying in full, the fee is small or waived, and spreading the payment helps your monthly budget. Shorter EMIs cost less, because there is less interest for GST to be charged on. If your cash would otherwise sit in an FD, the interest it earns can cover part or all of the GST and fee: turn on Keep my cash to check.
Closing early
You can usually pay off a card EMI before the last month. Banks may charge a closing fee (often up to 3% of what is left, plus GST), and some take back the unused part of the seller's discount, because that discount was meant to cover interest you will no longer be charged. The calculator shows this as an estimate; your card's EMI terms decide the actual amount.
Common mistakes
- Ignoring the full-payment discount. It is often bigger than all the other costs together.
- Picking the longest EMI by default. More months mean more interest, and more GST on it.
- Forgetting the card limit. The whole amount is blocked on your card from the first day and frees up only as you pay.
- Missing an EMI. A late EMI brings late fees and interest that are not "no-cost" at all.
A short checklist
- Ask the shop for the price if you pay in full.
- Ask the bank for the EMI rate and the fee, and whether they can waive the fee.
- Pick the shortest EMI you can comfortably pay.
- Set up an auto-debit so no EMI is missed.
Rates, fees and GST practice differ by card and change over time; check your card's EMI terms before you confirm. This is a guide, not advice.
Sources
Facts checked 18 Oct 2026RBIPernicious practices of select banks deterring customer protection and accounting integrity (RBI/2013-14/292) · Reserve Bank of India2013
RBI said zero per cent interest card EMI schemes were misleading, because the interest was hidden in fees or the price. 17 Sep 2013
RBIMaster Direction – Credit Card and Debit Card – Issuance and Conduct Directions, 2022 (para 6(b)(iii)) · Reserve Bank of India2022
Before an EMI conversion the card issuer must show the principal, the interest and any discount that makes it no-cost, and show them on the statement. 21 Apr 2022, updated 7 Mar 2024
CBICNotification No. 12/2017-Central Tax (Rate), entry 27 (updated version) · CBIC / GST Council2017
Interest on loans is exempt from GST except interest involved in credit card services, so GST is charged on card EMI interest. 28 Jun 2017, as amended to 1 Apr 2019
Questions
Is no-cost EMI really free?
Not quite. The interest is paid for you, but you still pay 18% GST on that interest and usually a processing fee with GST. If paying in full would have got you a discount, giving that up is a cost too. The calculator adds all of it.
Why does my card statement show interest on a no-cost EMI?
Because it is a normal loan. The interest appears each month and the seller's discount cancels it out, either as a lower order price or as a credit on your statement. The GST on the interest is not cancelled.
How is GST on a no-cost EMI worked out?
It is 18% of the interest part of each EMI, and 18% of the processing fee. The interest part is largest in the first month and shrinks as you repay, so the GST shrinks too. The month-by-month table shows it.
Can I close a no-cost EMI early?
Usually yes. The bank may charge a closing fee and may take back the part of the seller's discount meant for the months you skip. Turn on Close early to see an estimate, and check your card's EMI terms.
Is a no-cost EMI better than paying in full?
If there is no discount for paying in full and you can easily pay the EMIs, the extra cost is small and the EMI can help your cash flow. If paying in full gets you a discount, that is usually the better deal.
Does a no-cost EMI affect my credit score?
It uses part of your card limit until it is repaid, which raises your credit use for a few months. Paying every EMI on time keeps it from hurting your score.