What happens if I default on my two-wheeler loan payments?

Defaulting on your two-wheeler loan means missing one or more scheduled payments. Here's what you can expect if this happens,

1. Impact on Credit Score: Late or missed payments will negatively affect your credit score. A lower score can make it harder to secure loans or get favourable interest rates in the future
2. Late Fees and Penalties: Lending institutions typically charge late fees for missed payments, which increase the total amount you owe.
3. Communication from Lending Institution: Your lending institution will initially contact you to remind you of the missed payment. If the payment is still not made, they may typically follow up with more reminders, including phone calls and letters.
4. Potential Repossession: If you continue to miss payments, the lending institution has the right to repossess your two-wheeler. They can do this without going to court and usually without any additional charges.
5. Legal Consequences: Sometimes, the lending institution may take legal action to recover the remaining loan amount. This can result in court fees and further damage to your credit.
6. Difficulty Obtaining Future Loans:  A history of defaults can complicate your ability to secure new loans or credit lines, as lending institutions are likely to perceive you as a higher risk.