Personal Loan EMI: If you have ever missed even one EMI of a personal loan, do not take it lightly. This leaves a direct stain on your financial credibility in the eyes of banks and credit agencies. Even a small delay can drop your credit score by 50 to 100 points, which can further affect your chances of getting a loan or credit card.
Missing EMIs indicates that you are finding it difficult to manage your debt. If this happens, not only does the bank impose a penalty on you (up to 1%-2%), but a record of ‘defaulter’ is created in your file. If the loan outstanding amount remains pending for more than 90 days, it can be declared as Non-Performing Assets (NPA), meaning the bank now considers you a high-risk customer. After this, problems like recovery calls, notices or legal action may start.
Direct impact on credit score
Your credit score (CIBIL, Experian, Equifax etc.) mainly depends on your payment history. Once a score falls, it may take months to improve again. Moreover, bad records remain in the reports for many years.
how to protect yourself
- Set up auto-debit so that EMIs are deducted on time.
- If there is a financial crisis, then demand re-structuring or moratorium from the bank.
- Keep an emergency fund so that there is no problem in paying EMI for 3 months.
- Check your credit report regularly and if you find any mistakes, get them rectified.
Frequently Asked Questions (FAQs)
Question 1. What will be the impact on credit score if I miss an EMI?
Answer- A default is reported to the credit bureau, which reduces your score and makes it difficult to get a loan in future.
Question 2. Can creditors take action against me?
Answer- Yes. Prolonged non-payment may trigger legal notice or recovery proceedings, depending on the loan product and amount.
Question 3. What’s the best way to deal with mounting debt?
Answer- Stop taking new loans, discuss restructuring with the lenders. Give priority to high-interest loans in your repayment plan.
