# No Cost EMI Calculator: Hidden GST, Fees and Real Cost > Is no cost EMI really free? See the interest paid as a discount, 18% GST on it, the processing fee with GST and any discount you lose, as one real cost. Source: https://trykosh.com/tools/no-cost-emi-calculator Free tool - Loans and credit cards # No-cost EMI: what it really costs No-cost EMI is a loan whose interest is paid by the seller as a discount. You still pay GST on that interest, plus a processing fee. Here's the real number. Rules checked 25 October 2026Free - no sign-upRuns in your browser Real cost of the no-cost EMI INR 692 1.15% over paying INR 60,000 upfront GST on interest**INR 457** Fee incl. GST**INR 235** Effective yearly rate**4%** Price on the tag INR 60,000 Discount given by the seller (= the interest) INR 2,540 Loan the lender actually books INR 57,460 6 EMIs of INR 10,000 Interest inside the EMIs INR 2,540 \+ GST at 18% on that interest INR 457 \+ Processing fee with GST INR 235 What you really pay INR 60,692 What each statement shows Month EMI Interest in it GST on interest 1 INR 10,000 INR 718 INR 129 2 INR 10,000 INR 602 INR 108 3 INR 10,000 INR 485 INR 87 4 INR 10,000 INR 366 INR 66 5 INR 10,000 INR 245 INR 44 6 INR 10,000 INR 123 INR 22 The interest is real: the seller pays it to the lender as a discount. GST on that interest and the processing fee are what you pay on top. ## Upload your statement and Kosh does this for you. Upload a bank or card statement and Kosh finds every EMI and card charge, then builds the fastest way out of debt that still fits your month. [Start free](/signup?via=tool-no-cost-emi-calculator) ## How the no-cost EMI calculator works With no-cost EMI, the lender still charges interest. The seller or brand gives you a discount equal to that interest, so the EMIs add up to the sticker price. For a INR 60,000 phone over 6 months at 15%, the bank actually lends about INR 57,460 and the interest of about INR 2,540 makes up the gap. On a credit card, interest is a taxable service, so 18% GST is charged on the interest in each month's statement, even though the seller covered the interest itself. Interest on a consumer loan from a bank or NBFC is exempt from GST, so pick the option that matches your offer. Most no-cost EMI offers also carry a processing fee, often a few hundred rupees, plus 18% GST. And many products have an instant or cash discount that you lose by choosing no-cost EMI. Add that in the last field: it is a real cost. The calculator totals all of this and works out the effective yearly rate: the rate at which the money you'd have paid upfront equals what you pay over time. It is often small, but it is never zero. Loan booked = price / (n x EMI per rupee at the lender's rate); Real cost = 18% x interest (card only) + fee x 1.18 + discount given up Interest price − loan booked, paid by the seller as a discount n EMI tenure in months ## Worked example: Rohan's INR 1.2 lakh laptop Rohan buys a INR 1,20,000 laptop on 9-month no-cost EMI on his credit card, where the lender's rate is 16%. The seller's discount of INR 7,624 covers the interest, but he pays INR 1,372 in GST on it and INR 353 in processing fee with GST. He also gives up a INR 5,000 instant discount offered for full payment. His real cost is INR 6,725, an effective rate of 13.9% a year. Real cost of the no-cost EMI INR 6,725 5.6% over paying INR 1,15,000 upfront GST on interest**INR 1,372** Fee incl. GST**INR 353** Effective yearly rate**13.9%** Price on the tag INR 1,20,000 Discount given by the seller (= the interest) INR 7,624 Loan the lender actually books INR 1,12,376 9 EMIs of INR 13,333 Interest inside the EMIs INR 7,624 \+ GST at 18% on that interest INR 1,372 \+ Processing fee with GST INR 353 \+ Upfront discount you give up INR 5,000 What you really pay INR 1,21,725 The interest is real: the seller pays it to the lender as a discount. GST on that interest and the processing fee are what you pay on top. [Load this example into the calculator ->](?price=120000&months=9&rate=16&fee=299&lost=5000#calculator) ## Good to know - Check whether a full-payment discount or cashback is available. Losing it is usually the biggest hidden cost of no-cost EMI. - The EMI amount blocks your card limit until it is repaid, which can push up your credit utilisation. - Foreclosing a no-cost EMI early can mean losing the discount and paying the interest yourself, plus a fee. - Missing an EMI turns it into a costly default: late fees, penal charges and GST, and a mark on your credit report. ## Frequently asked questions Is no-cost EMI really free? No. The interest is real but paid by the seller as a discount. On a credit card you still pay 18% GST on that interest, plus a processing fee with GST, and you may lose a discount available for full payment. Why is GST charged on no-cost EMI? On credit cards, interest is part of a taxable card service, so the bank charges 18% GST on the interest in each statement. The seller's discount covers the interest, not the GST on it. Is no-cost EMI better than paying upfront? If the extra cost is small and you'd otherwise dip into an emergency fund, it can be reasonable. If paying upfront gets you a bigger discount, paying upfront is cheaper. Does no-cost EMI affect my credit score? It's reported like any other card or consumer loan. Paying on time helps your history, but the blocked limit raises card utilisation and missed EMIs hurt your score. What did RBI say about zero-interest EMI? In 2013 RBI told banks that zero-percent EMI schemes don't truly exist, since the interest is recovered through fees or price, and asked them to be transparent. The Key Fact Statement rules now require the full cost to be disclosed. ## Sources and assumptions - [Reserve Bank of India](https://www.rbi.org.in/) - [CBIC GST portal](https://cbic-gst.gov.in/) Rules and rates last checked on 25 October 2026. Results are estimates for planning and education, not tax, legal or investment advice. Kosh is an educational financial planning tool by Primedepth Labs. It is not a SEBI-registered investment adviser and does not offer personalised investment advice, hold your money or execute trades. Markets carry risk; read scheme documents carefully and consult a registered adviser before acting.