If you forget to fill EMI, you will be in trouble, so big can be damaged

Domestic debts in India are continuously increasing and along with this, cases of default ie loans are also increasing rapidly. If you have also taken a personal loan, then it is very important to repay the EMI of every month on time. If not done, then these five major problems will not leave you.

Credit score will get a big blow

By missing just an EMI, your credit score can fall from 50 to 70 points. The effect of this is that later you can find it difficult to take a new loan or the interest rates can be very high.

late fees and fine increases burden

Banks or NBFCs usually charge 1 & ndash; 2 percent late charge on missing EMI. In addition, the penalty interest is also added which increases the total cost of your loan even more. Not paying EMI directly affects the credit score. If you have made a habit of payment on time, then you get better loan options ahead.

small mistake or big crime? This is the difference

If you did not pay within 90 days, then it is called Minor Default. But after 90 days, this loan is declared NPA (Non-Performing Asset) and then your financial image deteriorates. Its effect lasts for years and it can be difficult to get a loan or credit card in future.

recovery calls and court notice

If you do not pay EMI for 60 days, then you start getting recovery calls. By defaulting for a long time, the bank can also initiate legal action against you, especially under the Negotiable Instruments Act, 1881.

Future borrowing will affect

When the EMI lapses and the loan becomes NPA, your financial track record is completely affected. Then either you will get a loan at a very high interest rate or the bank will refuse to give a loan only.