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Zero Percent Finance - What is the real truth?

  1. #1
    Guardian Angel just4kix's Avatar
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    Dec 2007

    Default Zero Percent Finance - What is the real truth?

    Is Zero Percent Finance really zero percent?

    A quick calculation by me tells me exactly opposite.

    0% Finance option is not really that attractive. Recently I purchased the Panasonic P50ST50D plasma TV for Rs. 105,000. I was seriously considering zero percent finance. Here are the nuances of the scheme:

    • The landed cost of 50ST50 as 105,000
    • Divide the cost by 12. This comes to 8,750.
    • With Bajaj Finance, they say 9 EMIs at 0%, Rs. 1000 as processing fees. Some minimal documentation (id proof + residence proof) and nine PDC's of Rs. 8,750 are required.
    • Upfront payment is Rs. 27,250 and the rest @ Rs. 8,750 x 9.
    • So I would be receiving a "loan" of Rs. 78,750 for a period of 9 months and would have paid Rs. 1,000 upfront as fees. This works to 17% interest.
    • Note that there is no reducing balance or anything like that.

    Unless, there are zero fees or you are in dire short of cash, do not opt for Zero Percent Finance. I did my own calculations and found this not worth at all.
    Last edited by SmoothVibes; 3rd March 2016 at 04:22 AM.
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  2. #2
    Platinum Member panchabhut's Avatar
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    Jan 2009


    many electronics shop have tie up with credit card providers (ICICI/Citi/HDFC/SBICSPL etc) who provide 3/6 EMI option with zero interest and zero processing fees. that is a good option. as they get a transaction processing fee from the vendor, the banks can provide really free EMIs.
    never go for finance company schemes. they are looters.
    just4kix likes this.

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