No-Cost EMI Calculator
What a no-cost EMI really costs vs paying in full — GST, fee, lost discount and the true yearly rate
Reviewed by the PaisaTools Editorial Team · Last reviewed September 2026
How to use: Enter the price, pick the tenure, and copy the card's EMI rate and the processing fee from the checkout page or your card's EMI terms. Add the instant discount you would get by paying in full, or leave it at 0.
ExampleA ₹60,000 phone on a six-month no-cost EMI at a 15% card rate with a ₹199 fee — when paying in full would have earned ₹3,000 off.
The price the EMI is offered on — the instalments add up to exactly this
Still charged on a no-cost EMI — the seller cancels it with a discount. Card EMI rates commonly run 13–24%; it is in your card's EMI terms
One-time, before GST. Often ₹99–₹299 on cards; shown at checkout or in the EMI SMS. 18% GST is added for you
Instant bank discount or cashback that only applies to full payment. Put 0 if paying in full gets nothing extra
"No-cost" EMI costs you extra
₹3,692
True cost, a year
24.3%
EMI × 6
₹10,000
Pay in full instead
₹57,000
Where the extra goes
- GST on the interest₹45712%
- Processing fee + GST₹2356%
- Full-pay discount given up₹3,00081%
The lender books a loan of ₹57,460 and charges ₹2,540of interest on it. The seller's discount cancels that interest — so far it really is free. It does not cancel the ₹457 of GST on that interest, which arrives spread across your statements.
Paying in full is cheaper by ₹3,692. Treat the EMI as a loan of the full-pay price and it costs about 24.3% a year — credit-card territory.
The full ₹60,000 is blocked on your credit limit from day one. Miss an instalment and late fees apply, and some issuers then withdraw the no-cost benefit on what is left.
The same offer at every tenure
| Tenure | EMI | GST on interest | Extra vs full pay | True cost / yr |
|---|---|---|---|---|
| 3 months | ₹20,000 | ₹264 | ₹3,499 | 43.4% |
| 6 months | ₹10,000 | ₹457 | ₹3,692 | 24.3% |
| 9 months | ₹6,667 | ₹645 | ₹3,880 | 17.4% |
| 12 months | ₹5,000 | ₹829 | ₹4,063 | 13.8% |
| 18 months | ₹3,333 | ₹1,182 | ₹4,417 | 10.1% |
| 24 months | ₹2,500 | ₹1,519 | ₹4,754 | 8.2% |
Longer tenures add more GST, but spread a fixed fee and discount over more months — so the yearly rate falls while the rupees rise.
“No-cost EMI” is printed under almost every price in a festive sale. The lender has not decided to lend for free. It charges its normal EMI rate, and the seller cancels that interest with an upfront discount, so your instalments add back up to the price. That part is genuinely free.
Three costs survive it. The GST on the interest, because the discount cancels the interest and not the tax on it. The processing fee, with GST of its own. And — usually the largest — the instant discount you give up when paying in full would have earned one.
Most no-cost EMI calculators stop at the first two. This one adds the third, compares the EMI against the real full-pay price, and turns the difference into a yearly rate so you can see what kind of loan you are taking. It does it for every common tenure at once.
The reasoning, line by line, is in No-cost EMI: the real cost nobody shows you. For an ordinary loan's EMI and schedule, use the EMI calculator; to compare a card EMI with a personal loan, credit card vs loan.
The method follows how lenders book no-cost EMIs: the instalments equal the price divided by the tenure, and the loan is their present value at the lender's EMI rate, so the interest equals the seller's discount. GST at 18% is applied to each month's interest and to the processing fee, as the GST law requires on financial-service charges. The yearly rate is the internal rate of return of the EMI cash flows measured against the full-pay price, compounded monthly. Card rates and fees vary by issuer and offer; your own checkout figures always override the defaults.
- Rates, fees and full-pay discounts vary by issuer and offer — use the figures from your checkout.
- Assumes every instalment is paid on time; late fees and a withdrawn no-cost benefit are not modelled.
- Is no-cost EMI really interest-free?
- No. The lender charges its normal EMI rate. The seller gives an upfront discount equal to that interest, so the loan the bank books is smaller than the price and the instalments add back up to the price. The interest exists, it is simply paid by the discount — which is why GST is still charged on it.
- Why is GST charged on a no-cost EMI?
- GST at 18% applies to the interest component of every instalment and to the processing fee. The seller's discount cancels the interest amount, not the tax on it, so the GST appears on your card statements month by month.
- What is the processing fee on a no-cost EMI?
- Most card issuers charge a one-time fee to convert a purchase into EMIs, commonly ₹99 to ₹299, and some charge a percentage of the amount. 18% GST is added to the fee. The exact figure is shown at checkout or in the bank's EMI confirmation SMS.
- Should I take no-cost EMI or the instant discount for paying in full?
- Compare totals. The EMI route costs the price plus the GST on the interest plus the fee with GST. The full-pay route costs the price minus the instant discount. When paying in full earns a discount of a few thousand rupees, it usually wins — the calculator above shows by how much, and the yearly rate the EMI is really charging you.
- Which tenure is cheapest on a no-cost EMI?
- In rupees, the shortest: GST is charged on interest, and interest grows with tenure. As a yearly rate, longer tenures can look lower, because a fixed fee and a lost discount are spread over more months. The table above shows both for your offer.
- Does a no-cost EMI affect my credit score?
- It can. The full purchase amount is blocked against your credit limit from day one, which raises your credit utilisation while the plan runs. A missed instalment is reported like any other late payment, and some issuers withdraw the no-cost benefit on the remaining balance.