LG C9 OLED at 1.2L effective on Amazon. Hear me out.

[baker]

I'm afraid that's not the right calculation.
Price for Tv = 1.39L.
with HDFC No cost emi option for 24 months, the price for tv is still 1.39L, but you will be paying 1.39L/24 = 5791 each month, for 24 months.

Now, how are they achieving this?
They calculate it in such a way that InterestOn( X amount) + X = 1.39L.
When you solve for X with the interest %, you will arrive at X = 1.2L, which implies a 19k discount, which is what Amazon will charge your credit card.

There is nothing to credit here, they will charge you the discounted amount in the first place.
Also, your second line

This would mean that HDFC gave you a bank loan of 1.39L without any interest, which is illegal according to RBI.
The discount here is provided by Amazon and not HDFC.

If thats how it is working , we can try it out but my best guess is the EMI is the tricky part.

I am just telling my current scenario [may be it is not applicable here]

for me 1.25L for 12 months with non Cost EMI option.

My Monthly EMI is : 11282 * 12 = 135384
and for me cashback is : 10387
So total effective price is : 1.25
So , if i want to close the loan to bank i am liable to make 135384 , not 1.25L.

And in your screenshot it says clearly [ The bank will continue to charge Intrest on EMI ]

I may be completly wrong here , but it is a worth to try this option

 

[josedandrew]

I dont understand ,

Price for TV == 1.39
with HDFC EMI option for 24 months it will be : 1.39 + 19k [interest]
But HDFC is giving the discount for interest so : 1.39 + 19k[intrest] - 19k[Discount for interest u paid]

so affectively it will be 1.39 again right ..?

And if you think , they will credit 19k to your account immediately you are wrong , it will take time t reach your account

Let me try to simplify it.
You buy the tv at 1.39L and opt for no cost emi.
Now due to RBI regulations, no cost emi cannot be provided by banks.
So what they do is that the interest amount is paid to you upfront, which means your credit card is charged only 1.2L...!
Then your 1.2L loan is converted into 24 months emi with interest and in the end you pay the same 1.39L over a period of 24 months.
Now after the purchase you can decide to foreclosure the loan and instruct the bank accordingly.
Bank in turn bills you the entire amount of 1.2L in the next month bill.

 

[pauljoseph]

If thats how it is working , we can try it out but my best guess is the EMI is the tricky part.

I am just telling my current scenario [may be it is not applicable here]

for me 1.25L for 12 months with non Cost EMI option.

My Monthly EMI is : 11282 * 12 = 135384
and for me cashback is : 10387
So total effective price is : 1.25
So , if i want to close the loan to bank i am liable to make 135384 , not 1.25L.

And in your screenshot it says clearly [ The bank will continue to charge Intrest on EMI ]

I may be completly wrong here , but it is a worth to try this option

Would you mind sharing where you availed the emi or bought the product from? My guess is it would have been an offline retail place.

From what I've understood, this trick will only work on Amazon/Flipkart and not for offline stores.
I don't know of any offline store that provides no cost emi (Bajaj financing is a whole other story).

But what the stores do instead, is, provide normal emi but give you a cashback for the interest in the end, which is different from how Amazon/Flipkart operates.

 

[dream_designer]

This idea has taken me to another perspective, how about buying on company's name and get the credit of GST landing price will be 1.10 as per amazon, most stores are out of stock with C9

 

[rksingh1]

Let me understand - the online platform is discounting the interest and an amount equal to the interest gets credited back to credit card account to make it zero interest?

In above example, Amazon will credit my credit card with 19?

 

[pauljoseph]

This idea has taken me to another perspective, how about buying on company's name and get the credit of GST landing price will be 1.10 as per amazon, most stores are out of stock with C9

Yes. That is the obvious way to go if you have a business. I think all the business owners already do this.

 

[pauljoseph]

Let me understand - the online platform is discounting the interest and an amount equal to the interest gets credited back to credit card account to make it zero interest?

In above example, Amazon will credit my credit card with 19?

No. The online platform is discounting the total price in such a way that (discounted price) + (Interest on discounted price) = 1.39L.

Here,
(discounted price) = 1.2L
(Interest on discounted price) = 19K.

The (discounted price) is what will be charged to your credit card as the price of the item. And you will pay interest on that normally over the course of the next few months which will in the end add up to the total price in the long run.

 

[Rane-2020]

Yes. That is the obvious way to go if you have a business. I think all the business owners already do this.

But usually you don't get GST invoice online.Anyways high-end TVs are always cheaper offline.But saving is huge.you can save around 40K on a 65 C9 selling for 1.85L

 

[rksingh1]

The (discounted price) is what will be charged to your credit card as the price of the item

Can any of you check your credit card statement and confirm this?

 

[gowmara]

If thats how it is working , we can try it out but my best guess is the EMI is the tricky part.

I am just telling my current scenario [may be it is not applicable here]

for me 1.25L for 12 months with non Cost EMI option.

My Monthly EMI is : 11282 * 12 = 135384
and for me cashback is : 10387
So total effective price is : 1.25
So , if i want to close the loan to bank i am liable to make 135384 , not 1.25L.

And in your screenshot it says clearly [ The bank will continue to charge Intrest on EMI ]

I may be completly wrong here , but it is a worth to try this option

Bank will be freezing only 1.25L from your card. Then on monthly basis they will add interest. Online portal (with manufacturing company and bank) are the one who is providing this offer, so the amount loss will be a shared one for all three if you get your interest discount.
Everything now is on risk basis, due to no cost emi they are getting 99% sale, may be 1% might close their emi upfront, so it is acceptable for them

 

[pauljoseph]

Can any of you check your credit card statement and confirm this?

Yes. But it won't show up in normal statements I think.

Is there anyone who has bought any device on No cost EMI from either Flipkart or Amazon anytime in the past?
All you have to do is call your bank's customer care, verify yourself with card/account number, etc, and then tell them that you had made a purchase with no cost emi in X year, Y month and ask them what was the amount that was charged to your card/ the principal amount charged. And compare that amount with the price of the device by looking at your past order in Amazon/Flipkart, chances are that the amount that your bank executive mentions is lower than the amount shown on Flipkart/Amazon.

Here's another tip for everyone on how to check this. You can't check by going through your statements. At least, it won't show as a transaction.
Another way to check this if you have a current no cost emi running is by looking at the amount by which your credit limit decreased in the first month right after the transaction.

I tried this with Citibank and can confirm that it works. The bank executive couldn't see the total amount at all. The amount he was able to see was the discounted amount. So in their systems it will look like a normal loan that I took(discounted amount) and paid off eventually.

NOTE: This will work only for online sites like Amazon/Flipkart where your (monthly cost x number of months) = total cost of device. It is not for offline cashback concept where you are paying the normal EMI and they will give the interest as a cashback at the end. That's a different concept and not how online stores work.

 

[harryneopotter]

I order stuff via Amazon (on no cost EMI) for my friends all the time. Only the amount after the discount (interest part) is deducted. So as long as we can foreclose the EMI loan without any extra charges, this should work.

 

[Love4sound]

For foreclosure you need to call hdfc customer care and raise the request. They will close the loan and send you an email with remaining payment. Even after you complete the purchase you get a welcome email. I couldn’t get the email but remember it was mentioned in the terms and conditions 3% of remaining principal amount will be charged as foreclosure fees with gst and also additional pro rata interest and gst for that pro rata interest. Please find the image of the email I received for foreclosing the emi loan of 50k after paying for 6 months. It does mention 3% foreclosure charges but didn’t charge me. Only pro rata and interest.

 

[pauljoseph]

For foreclosure you need to call hdfc customer care and raise the request. They will close the loan and send you an email with remaining payment. Even after you complete the purchase you get a welcome email. I couldn’t get the email but remember it was mentioned in the terms and conditions 3% of remaining principal amount will be charged as foreclosure fees with gst and also additional pro rata interest and gst for that pro rata interest. Please find the image of the email I received for foreclosing the emi loan of 50k after paying for 6 months. It does mention 3% foreclosure charges but didn’t charge me. Only pro rata and interest.
View attachment 48244

Would you mind telling us where this EMI was availed? Flipkart/Amazon or was it in an offline store?

Also, yes, the foreclosure policy is bank specific I guess. HDFC is pretty unique compared to the rest because it charges 99 as processing fee for no cost emi unlike the other banks. And it is also the only bank that provides 24month no cost EMI. All the other banks only provide a maximum of 9-12 months, so there indeed might be some charges at play.

But, if you look at it in general, the concept still works. Get longest no cost EMI and foreclose to squeeze in that extra discount.

 

[Love4sound]

Would you mind telling us where this EMI was availed? Flipkart/Amazon or was it in an offline store?

Also, yes, the foreclosure policy is bank specific I guess. HDFC is pretty unique compared to the rest because it charges 99 as processing fee for no cost emi unlike the other banks. And it is also the only bank that provides 24month no cost EMI. All the other banks only provide a maximum of 9-12 months, so there indeed might be some charges at play.

But, if you look at it in general, the concept still works. Get longest no cost EMI and foreclose to squeeze in that extra discount.

I got it offline but it is the same scheme that is offered in amazon and Flipkart. The product is merchant loan from hdfc I guess.

 

[gowmara]

Citi bank might the best candidate for this scheme. Don't ever take a chance with ICICI, I think it has some bad policy. Also make sure any lock-in period before preclosure

Emi discount is provided by offline stores (including manufacturer), so ideally if you are paying full amount, you are getting some additional discount.

 

[pauljoseph]

I got it offline but it is the same scheme that is offered in amazon and Flipkart. The product is merchant loan from hdfc I guess.

Ahh, and therein lies the difference.
Offline no cost EMI != Online no cost EMI.

Although, we might think, the end result is the same, both work slightly different.

Eg:
Consider product cost = 1L.

Let's say,
1. Interest on 95K, for 12 months = 5K.
So, at the end of 12 months, you will pay 95K+5K = 1L
EMI per month = 1L/12 = 8333.

2. Interest on 1L, for 12 months = 7k.
So, at the end of 12 months, you will pay 1L + 7K = 1.07L
EMI per month = 1.07L/12 = 8916.

(I've exaggerated the values to make it easier to follow.)

Offline case:
The customer goes to the retailer and proceeds to buy the device for 1L.
The retailer provides financing options with his bank tie-ups.
And eventually, he gets you to avail a normal EMI loan from the bank for 1L.
This will comply with option 2 above and is not a NoCost EMI, it is a normal bank loan for 1L.
Your credit card limit will decrease by 1L.
Per month EMI will be 8916.

But due to the tie up, the retailer tells you that he will lend you a cashback of 7K at the end thereby making your effective cost to come down to 1L.
But this cashback is something that he could have given you in the beginning if you were ready to pay full amount and you might be able to squeeze that in depending on your bargaining skills and what kind of tie up the retailer and bank has.

This perfectly comes in line with what the Citibank executive told me, that there will be charges to foreclose this EMI as it is a normal loan.
End Result:
You paid 1.07L
Cashback 7k after the duration.
Net = 1L

Online case Amazon/Flipkart:
The customer goes to the website and proceeds to buy the device for 1L.
Amazon/Flipkart provides NoCost EMI.
They will show that you only have to pay exactly 1L/12 for 12 months.

This will in-turn reflect as a loan of 95k. As interest according to Option 1 above is 5K for 95K.
Your credit card limit will decrease by 95K.
Per month EMI will be 8333.

End Result:
You paid 1L
Net = 1L

And hence, I believe this kind of leverage can be used only by the online retailers because of their economies of scale or something like that at play.
Everyone is a winner. Customer gets deferred payment, banks get a loan and can show it in their books for investors, the ecommerce giant also made a sale which might not have happened had there been a NoCost EMI.

 

[dillihifi]

NOTE: This will work only for online sites like Amazon/Flipkart where your (monthly cost x number of months) = total cost of device. It is not for offline cashback concept where you are paying the normal EMI and they will give the interest as a cashback at the end. That's a different concept and not how online stores work.

It should then theoretically work on offline stores as well. Most of the larger stores also offer this facility where the emi discount is adjusted on the first payment and the amount is charged accordingly let me chk out my old statements where i had purchased an washing machine through physical stores.

 

[sandeeprawat]

Yes. That is the obvious way to go if you have a business. I think all the business owners already do this.

How would this work? If tax is not paid twice how can one claim it ? Wouldnt one have to show a valid sale to claim credit?

 

[harshunlimited]

How would this work? If tax is not paid twice how can one claim it ? Wouldnt one have to show a valid sale to claim credit?

No, you just show the TV as part of your office expenditure & claim input GST, a big 28% saving right away.
Heck, you may even claim 40% depreciation (calculated through the written down value method) every year in your co's ITR.
Also, if @pauljoseph 's above idea works, then amazon business portal also has this 65 & 55 C9 with GST invoice and No Cost EMI option available thereby saving you a huge chunk.