What Happens to EMI When You Cancel or Return an Online Order?

With the increasing trend of shopping on EMI (Equated Monthly Installment), a common question arises:

What happens if you cancel or return a product that you bought on EMI?
You might assume the EMI will be automatically cancelled—but recent experiences show otherwise.

Let’s understand this in detail.

🛍️ The New Reality: EMI is Not Cancelled—Loan Amount is Refunded

Earlier, when you cancelled or returned an item, the EMI plan was often reversed and closed by the bank. However, as per recent trends, things have changed.

Now, in most cases:

• The EMI continues even if you cancel or return the product.

• The Loan amount is refunded to your Card Account. 

• You are now responsible to repay the EMI in full, just like a personal loan. 

  
  
  

💡 How This Works — A Simple Example

Imagine you buy a phone worth ₹30,000 on EMI.

• You choose a 6-month EMI, and the bank approves the loan.

• A few days later, you return the phone.

• The seller refunds ₹30,000 to your account, not to the bank.

• But your EMI loan continues—you still pay EMIs every month as per the loan schedule.

Now, you have ₹30,000 in your account, but also an active loan of ₹30,000.

⚠️ What Are Your Options Now?

1. Keep the Money & Pay EMI Monthly:

   • Treat it like a personal loan.

   • Use the money for other needs if required.

2. Prepay or Close the Loan:

   • If allowed by the bank, you can repay the full amount early.

   • Some banks have a lock-in period or pre-closure charges, so read the fine print.

3. Contact Customer Care for Clarification:

   • Especially if it's a No-Cost EMI, confirm whether interest/processing fees are refundable.

📌 Key Points to Remember

• Always read the EMI terms and return policy of the platform (Amazon, Flipkart, etc.).

• Processing fees or interest may not be refunded.

• The refund being sent to you instead of the bank shifts the responsibility of loan repayment to your side.

• Be prepared to handle EMI repayments even after returning the product.

✍️ Final Thoughts

Buying on EMI is convenient, but it’s important to know the full picture when things don’t go as planned. If you're a regular EMI shopper, stay informed and handle refunds carefully—especially when a cancellation or return is involved.

For more tips on smart money management, EMI planning, and financial literacy, stay tuned to Dhan Shiksha — your guide to wise wealth-building.