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What Happens When You Fail to Pay an EMI?

What Happens When You Fail to Pay an EMI?

What Happens When You Fail to Pay an EMI?

Many companies are considered to be one of the top financial services brands. It is widely known to provide services to retail and Micro Small and Medium Enterprise lending. It provides a basket of financial services, including personal loans, gold loans, and investment options like fixed deposits.

Interesting right? Well, it is. Getting financial support easily from the most trusted brand is very helpful. Along with the personal loans, this company allows its customers to buy the bike of their dreams. It can be done with the help of an EMI, which comes with its benefits and disadvantages.

So, let us take a look at the two-wheeler loan seizure process and the bike loan EMI default.

What if I Don't Repay My Bike Loan?

It will be disappointing as you are just a step away to get your dream bike. For this, you are required to pay the EMI default charges. So, to get your bike back, you will be paying the extra charges along with the EMI.

You will be liable to pay the extra charges and payment fees, bank charges, overdue interest, etc. As per the loan agreement, if you do not pay the EMI amount timely, then the lender holds the right to seize your asset and auction it. So, eventually, you will be involved to pay more than the EMI amount.

What if your cheque bounces and you are unable to pay your EMI? In this case, Shriram Finance states about the EMI charges in Schedule 2 of the loan agreement. You need to go through the agreement properly. The charges involve 36% per annum on the instalment amount along with the amount in arrears in the form of late payment charges.

For instance, if your EMI amount in a year was INR 50,000, you will likely pay the overdue interest of 18,000 as your final late payment charges.

Two-Wheeler Loan Seizure Process

The other consequences that you might face are in the following ways:

1. Low credit score

Non-payment of the EMI timely will allow the lenders to report this to the credit bureaus. What's next then? The total penalty needs to be paid along with the collection charges, overdue interest, etc. Your overall CIBIL score will be affected by this. Eventually, you will not be able to apply for loans in the future.

2. Affects your guarantor

If you are continuously ignoring the lenders' notices, then not only you but your guarantor shall also be liable to pay the EMI default charges. If the guarantor is responsible for your EMI payment, he shall be liable to pay your extra EMI charges.

Ultimately, the CIBIL score of your guarantor will be affected too. So, this will further lead to reducing his loan-taking capability:

  • If you fail to pay all of your bike's EMI's, then the last option left with the lender is to seize your asset and auction it. How frustrating is this, right? Well, you can avoid the situation by paying all your EMI payments timely.
  • On the other hand, the worst consequence will be that you have to pay the extra late fees charges, which is more than the actual EMI amount. Why do you even have to pay this extra sum? So, you must try not to let yourself come to this situation.
  • Besides this, the bank authorities shall also impose their charges on you, including the overdue interest. Also, not on that, your bike shall be seized, but it can also be towed.
  • You need to prevent such consequences from occurring, or you might lose your dream bike!

3. No more two-wheeler loans in the future

  • What if you do not pay your EMI's timely and also ignore the notices sent by the lender for more than 90 days? Well, you might get into big trouble! In such a situation, the lenders may pass on the loan to a collection agency. If your asset falls under the category of non-performing asset, then these collection agents will strictly handle this situation.
  • The collection agents will persistently get the repayment of the outstanding loan, EMI default charges, and bank charges. This is a bad scenario. Banks and financial companies may also send these collection agents to your residence or workplace.
  • Their job is to recover the due amounts from you. Well, a visit from the collection agent can be not only very stressful but also embarrassing. It will affect you personally, and you might lose your bike forever!
  • So, to overcome these consequences, the only possible way is to pay your EMI's timely. You need to be proactive about this at any cost. If your timeline is near paying for your EMI, you just need to prepare yourself beforehand.
  • If you are suffering from loss of income, you can approach your lenders, Shriram Finance, to ask to put a pause in EMI requests temporarily. You can repay your EMI once you get back on your feet.


In such times of difficulty, Shriram Finance shall provide you with a moratorium on repayment. It can help you to overcome the problem of EMI bounce charges.

But what is this moratorium? It is referred to as a "pause" on the repayment obligations. However, you need to get in touch with Shriram Finance to change the repayment schedule.

With 2,875+ branches across India and a simple online application procedure, you can get your bike financed by Shriram Finance. Shriram Finance is there to reduce your late payment charges and ensure a good credit score too! Visit today and explore opportunities.

Get a two wheeler loan at low interest rates