Are No-Cost EMIs really free?

No. The interest is given as a discount by the merchant, but you still pay GST on that 'waived' interest and a processing fee. If you miss a payment, the penalties are extremely high.

BNPL Debt Trap Simulator

Reveal the hidden cost of BNPL and No-Cost EMI purchases. See how processing fees and stacked EMIs trap your cash flow.

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Documentation

Quick Summary: BNPL Debt Trap Simulator

The 'BNPL Debt Trap' occurs when multiple small EMIs stack up to consume more than 40% of your monthly take-home pay. While 'No-Cost' EMIs often waive interest, they still charge processing fees (₹199+) and 18% GST. Missing a single payment cycle triggers flat late fees (~₹250), leading to an effective XIRR of 50-100% on small purchases.

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Regulatory Disclaimer

Last verified May 2026

Statutory Disclosure

Nature:Calculator platform and is NOT a SEBI-registered Investment Adviser. All calculations are indicative.

Risk:"Investments in securities market are subject to market risks. Read all related documents carefully before investing."

Consult a SEBI-registered IA or CA for personalised advice.

9 out of 10 traders in F&O incurred net losses (SEBI 2023). Tax estimates based on IT Act 2025. Trezoriq is not liable for financial decisions based on results.

BNPL Debt Trap Simulator

Reveal the hidden cost of BNPL and No-Cost EMI purchases. See how processing fees and stacked EMIs trap your cash flow.

Debt Trap Risk Score

17/100

SAFE: Your BNPL stack is well within income limits.

Portfolio XIRR

2.5%

True Effective Rate

Total Fees

₹235

Sunk cost

Income Context

Monthly Take-Home Salary

Stacked BNPL Purchases

Amount

Months

Processing Fee

Start Month

Simulate 1 Missed Payment Penalty (+â‚¹885)

Cash Flow Outlook

Monthly BNPL Obligation vs Salary

40% DTI Limit

₹30,000

The "No-Cost" Illusion

"No-Cost EMIs are not interest-free. The retailer pays the interest to the bank upfront as a discount. However, you still pay 18% GST on the interest component and usually a â‚¹199 processing fee. Stacking multiple 'small' EMIs creates a snowball effect that traps your future income before it hits your bank account."