What happens if I miss a personal loan EMI payment?

Missing a personal loan Equated Monthly Instalment (EMI) payment can have several repercussions. It is crucial to understand these potential consequences to avoid them and maintain a healthy credit profile. Some of the possible impacts of missing an EMI payment include:

• Late payment fees: Financial institutions may charge additional fees for late EMI payments. These fees can add up over time and increase your overall loan amount.
• Credit score impact: Your credit score could suffer from missed payments, making future loans harder to obtain. A lower credit score can make it more challenging to obtain loans or credit cards in the future and may lead to less favourable loan terms.
• Increased interest: Some financial institutions charge higher interest rates for late payments, raising overall loan costs.
• Legal action: In extreme cases, persistent non-payment may lead to legal action. This could involve asset seizures, or other serious consequences.

Staying current with EMI payments is essential to avoid penalties, protect creditworthiness, and maintain financial stability. If you anticipate difficulties, proactively communicate with your financial institution to explore possible solutions, such as loan restructuring or EMI deferment.

By working together with your financial institution, you can find a way to manage your loan effectively and minimise the potential negative impacts of missed payments.