The festive sales are on, and the question that reaches my desk this time of year is always some version of: “The store is offering no-cost EMI on the fridge. Why would I take a personal loan for it?”

Most of the time, you shouldn’t. I’m on the credit side at Securis, and I’ll say it plainly: for a single appliance or phone, a well-structured no-cost EMI is usually the cheaper option, and I’ll show you by how much. Where a personal loan starts to make sense is a different situation, and it’s worth knowing what that situation looks like before you’re at the billing counter.

What “no-cost” actually costs

A no-cost EMI isn’t a 0% loan. It’s an ordinary EMI where the lender still charges interest, and the brand or retailer gives you an upfront discount equal to that interest. The two cancel out, so your instalment is simply the price divided by the months.

The interest cancels out. A few other costs don’t:

  • GST on the interest component. On card-based EMIs, 18% GST is charged on the interest the bank bills you, even though the discount has offset the interest itself.
  • A processing fee, typically ₹199 to ₹999 per plan, plus GST.
  • The discount you give up. This is the one people miss. During festive sales, the full-payment price is often lower than the EMI price, through an instant bank discount, a cash offer or an exchange bonus that only applies to outright purchases. Choose EMI and you pay the higher price.

Here’s a real-shaped example: a ₹75,000 refrigerator on a 12-month no-cost EMI, with the card issuer’s rate at 16%.

  • EMI: ₹6,250 a month
  • Interest (offset by the discount): about ₹6,115
  • GST on that interest: about ₹1,101
  • Processing fee: ₹199 + GST = ₹235
  • Full-payment discount forfeited (say ₹3,000 off for paying outright): ₹3,000

Real extra cost: about ₹4,336. You pay roughly ₹79,336 for a fridge you could have bought for ₹72,000.

Now the personal-loan route. You borrow ₹72,000, pay the store outright and take the ₹3,000 discount. At 16% APR over 12 months:

  • EMI: ₹6,533 a month
  • Interest: about ₹6,391
  • Processing fee at about 2%: ₹1,440

Real extra cost: about ₹7,831.

On a single purchase, the no-cost EMI wins by roughly ₹3,500, and I’m not going to tell you otherwise. If there’s no full-payment discount at all, the no-cost EMI wins by even more. For one appliance, where you have the card limit and the EMI fits your month, take the store’s offer.

Where the math turns: three purchases on one card

Festive buying rarely stops at one item. Here’s a pattern I see often: a refrigerator at ₹75,000, a washing machine at ₹38,000 and a phone at ₹42,000, bought in the same fortnight, each on its own 12-month no-cost EMI. That’s ₹1,55,000.

On paper, the cost stays modest:

  • GST on interest across the three plans: about ₹2,275
  • Three processing fees: about ₹705
  • Forfeited full-payment discounts, say ₹5,000 in total

Real extra cost: about ₹7,980. Still cheap, but look at what it does to your month and your card:

  • Combined EMI: ₹12,917 a month for a year.
  • Card limit blocked: ₹1,55,000 of a ₹2,00,000 limit is tied up on day one. That’s 78% utilisation, and it leaves ₹45,000 of headroom for a medical bill or a travel emergency in the months you’d most want it.
  • Credit report: high utilisation can weigh on your score while it lasts. It recovers as the EMIs clear, but it’s worth knowing if you plan to apply for a home or car loan in the next year.

Now the FOIR view, which is how any lender, including us, reads your repayment capacity. Say your net salary is ₹55,000 and you already pay ₹11,000 a month on a two-wheeler loan and an older phone EMI.

  • Before the festive purchases: ₹11,000 / ₹55,000 = 20% FOIR
  • After three no-cost EMIs: ₹23,917 / ₹55,000 = 43% FOIR

A 43% FOIR isn’t a crisis. But the three new EMIs come on top of rent, groceries and school fees, and for the next 12 months roughly ₹24,000 of every salary credit is spoken for before you see it.

Considering this kind of loan? Apply for a Securis loan — typical disbursement is 1-2 working days.

The personal-loan alternative for the same basket. You borrow ₹1,50,000 (the full-payment price after the ₹5,000 in discounts), pay all three stores outright and leave the card untouched.

  • Over 12 months at 16%: EMI ₹13,610. Interest about ₹13,316 plus a ₹3,000 fee, so ₹16,316 extra. That’s about ₹8,300 more than the no-cost route, for a similar EMI. The only thing it buys you is a free card limit. For most people, that isn’t worth ₹8,300.
  • Over 24 months at 16%: EMI ₹7,344. Interest about ₹26,267 plus the fee, so ₹29,267 extra, about ₹21,300 more than the no-cost route. In return, your monthly outgo is roughly ₹5,500 lower, your FOIR lands at 33% instead of 43%, and your card is free.

That’s the trade-off in one line: you pay about ₹21,000 more over two years to keep ₹5,500 a month free and your card limit open. Some households should make that trade and many shouldn’t. It depends entirely on whether ₹12,917 a month fits comfortably or only just fits.

When a personal loan is the better tool

  • The combined EMI doesn’t fit at 12 months. Store plans are often capped at 6, 9 or 12 months. If the purchases only make sense at 24 months, a term loan gives you that room.
  • You don’t have a card with enough headroom. Many no-cost plans need an eligible credit card. If yours doesn’t have the limit, or you don’t hold one, the no-cost route may not be open to you.
  • The purchase isn’t EMI-eligible. Installation, a local dealer, a modular kitchen, a mix of items from different shops: one loan at a known rate can cover all of it.
  • The full-payment discount is large. Once a festive discount on outright payment runs into five figures, the arithmetic above can flip even for a single item. Ask for both prices and compare the totals.

Skip the personal loan if

  • It’s one item, you have the card limit and the EMI fits. Take the no-cost EMI. It’s the cheaper product, and the ₹3,500 difference is yours to keep.
  • You can pay outright from savings without dipping into your emergency fund. No EMI of any kind beats that.
  • You’d be borrowing to buy because the sale ends tonight. The price is rarely the last one of the season, and an extra EMI lasts longer than the discount.

When you do apply with us, the purpose prints as consumer durable on your documents. It doesn’t change the assessment: we look at your salary regularity, your FOIR, your existing obligations and your bounce history, the same as for any other personal purpose. Before you sign, the Key Facts Statement shows your all-in APR, fees included, so you can compare it line by line against the store’s plan.

If you want a second opinion on your specific situation, WhatsApp us — we’ll be honest about whether Securis fits.