> ## Documentation Index
> Fetch the complete documentation index at: https://razorpay-60c89f9a-mintlify-audit-missing-sections-1778528421.mintlify.site/llms.txt
> Use this file to discover all available pages before exploring further.

# About Low Cost EMI Offers

> With Low Cost EMI, you can now balance providing affordable financing to customers while maintaining a sustainable financial model. You can decide the cost to subvent for each EMI tenure and the customer bears the remaining cost. This approach ensures that customers enjoy the benefits of EMI at an affordable price, helping you minimise the overall cost.

<Info>
  **Handy Tips**

  You can create Low Cost EMI Offers on Credit and Debit card EMIs only.
</Info>

## Advantages

* Attracts more customers put off by high upfront costs, resulting in up to 20% sales boost.

* Businesses maintain financial health by sharing EMI costs with customers, thus balancing their books effectively.

* Offering extended EMI plans encourages customers to afford and consider premium products, ultimately boosting the average order value by up to 30%.

* Razorpay's user-friendly offer engine streamlines Low Cost EMI implementation with a few clicks, reducing entry barriers for businesses.

* Customers can spread costs over time, making expensive items accessible to more people.

* Businesses covering part of the installments reduce the overall cost, easing customers' financial burden.

* Longer EMI terms offer budget flexibility, allowing customers to align plans with their financial goals.

<Info>
  **Handy Tips**

  An EMI discount will be applied to the customer's purchase to partially cover the interest the bank charges. For example, if the bank's interest is 4.5%, you can partially cover 3%, and the customer bears the remaining 1.5%.
</Info>

## Example

Let us consider the example of a customer buying a mobile phone worth ₹15,000 on Low Cost EMI on a 3-month EMI period. The bank charges 16% interest per annum.

### Calculation of EMI

The Low Cost EMI calculation is given below:

## Components | Amount/Interest Rate/Months

## Cost of mobile phone | ₹15,000

## Tenure | 3 months

## Annual interest rate | 16%

## Effective interest rate for 3 months | 2.61%

## Interest subvented by you | 2%

## Discount offered @ 2% | (-) ₹300

Amount paid to you after discount | ₹14,700

## Components | Amount/Interest Rate/Months

## Amount repaid to bank in EMI | ₹15,000

## Effective interest paid to bank @ 0.61% for 3 months | ₹91.5

Net amount paid | ₹15,091.5

<Warning>
  **Watch Out!**

  Razorpay pricing is not included in this. It is applied in addition to the above amount.
</Warning>

### Related Information

* [Create Low Cost EMI Offers from the Dashboard](/payments/offers/low-cost-emi/create)
* [Integrate Low Cost EMI Offers with Standard Checkout](/payments/offers/low-cost-emi/standard-integration)
* [Tutorial: How to Create Low Cost EMI Offers](/payments/offers/low-cost-emi/tutorial)
* [Low Cost EMI FAQs](/payments/offers/low-cost-emi/faqs)
* [EMI²](https://razorpay.com/docs/build/llm-docs/payments/payment-gateway/emi².md)