Missed your EMI Payment this month….Now what???
No worries! We have all that you need to know about your missed EMI Payment consequences and remedial measures.
Today a friend of mine tried to get loan for his house renovation.Even though he is working in a reputed company,his loan application got rejected .He was disappointed .When he pulled out his Credit Report he found out that he missed out couple of EMI payment of his loan while he was out of India . So he spoke with the bank and did settlement of loan .Also he informed Credit authorities so that they can take corrective measures well on time.
Thanks to CIBIL report who helped my friend Raj to bring his credit report on track
Also there are other credit bureau in India like Equifax, Experian and CRIF who also give credit scores.
There are a lot of repercussions if we delay in EMI’s payment .Some of them are
- Credit Score drops:
With every default in payment CIBIL Score drops by few points.
- Impacts the Credit worthiness:
No matter if we do settlement with the bank, still Credit Bureau writes in report about the default in payment which affects the creditworthiness of loan buyer.
- Longest Credit Score Repair Time:
Once we default in EMI’S payment Credit Score drops and then it takes lot of time to get repaired .Even if we go for settlement still we should inform respective CIBIL authorities so that repaired Credit Score can be reflected in report for future borrowing.
Once we miss out on the EMI’S late payment, it will cost us more in terms of payment of EMI’s with very high Rate of Interest.
What Should I do now?
Well…there is a way forward. Let me give you a few tips
- Ask bank for moratorium for the period when you can’t pay the loan.
- Ask bank to restructure loan if interest rate hike is causing you a no show during time of EMI repayment.
- If your loan has insurance cover than insurance company can take care of at least three EMI’s in case of default due to medical emergency or job loss
- 30% of credit score depends on repayment history, so talk to the bank about your option to sell the property and repay the loan.
- Offer collateral to the bank so that they feel safe.
- Keep honest communications with bank so that they don’t report to Credit Bureau and give you some time to recover.