Is No-Cost EMI the Best Way for Student Fee Instalments?
Are No-Cost EMI plans the best way to offer monthly fee instalments to students?
If you’ve ever taken an online or offline course, you’ve probably seen “no-cost EMI” as a payment option. It lets students pay in instalments, helping them avoid paying the full fee upfront. Schools get paid in full right away, while they cover the interest for the student. The payment period usually ranges from 6 to 24 months. We offer no-cost EMI plans to many of our 2500+ partner schools.
But we’ve been debating: is Jodo Flex—our subscription-based payment system—a better option for institutes than no-Cost EMIs? Let’s break it down.
What is Jodo Flex?
It’s a flexible payment system that automatically collects fees from students at scheduled times, using eNACH or UPI autopay. Schools manage these schedules easily through Jodo’s software.
How is Jodo Flex better?
10x Better Experience for Students
- Jodo Flex takes 30 seconds to set up with no documents needed.
- With EMI, students must provide several documents (PAN, bank statements, etc.), which takes at least an hour.
- No need to deal with lenders if a student misses a payment. That can hurt a school’s reputation.
- Jodo Flex doesn’t involve credit checks, so schools won’t lose students because of low approval rates. No-cost EMI plans often have an approval rate below 60-70%.
10x More Flexibility
- With EMI, the payment plans are fixed (6, 9, 12, or 24 months). Jodo Flex allows schools to offer custom weekly, monthly, or even quarterly payments. Schools can adjust this easily through our fee management software.
1/10th of the Cost
- No-cost EMI plans are expensive for schools, costing 5-20% of the course fee upfront.
Now, let’s address two common concerns:
“But with no-cost EMI, I get guaranteed money, right?”
Not really. The biggest risk for lenders is students dropping out of the course. Whether it’s because they didn’t like the course, felt misled, or found it hard to follow, it’s a tough risk for lenders to assess. If too many students drop out, schools often end up paying through high fees or refunds. Eventually, lenders may even stop offering loans for those courses.
If dropout rates are low, schools can still collect efficiently using Jodo Flex without paying high interest. Plus, recurring payments keep schools more connected with students, allowing feedback during each payment cycle. If a student doesn’t pay on time, schools can apply a late fee or take more appropriate measures.
“But I get money upfront with no-cost EMI, right?”
Technically, yes. But with no-cost EMI loans, the interest rate is around 25% per year. That’s like taking out a loan on future payments at a high rate. Schools with good credit can usually get much cheaper loans. And if you need upfront payments, we can offer financing at lower rates based on your Jodo Flex receivables.
If you’re a school interested in Jodo Flex, let us know and we’ll be in touch. If you’re a student looking for monthly payments, ask your school if they’re on Jodo Flex!
Note: School represents any kind of educational institution. Can also mean a college, an edtech, a test prep coaching centre or an offline skilling institute.
