How It Will Impact If You Are Not Able To Pay Bank EMIs On Time?



Every Bank and financial organizations have their own rule’s regulated by the Reserve Bank Of India for granting a personal loan. The complete repayment schedule with the monthly installment details is clearly informed to every loan borrower at the time of loan disbursement. However, at times, even an honest borrower with an impeccable credit history may default on the due EMI due to several unavoidable reasons. While the financial institutions may not both too much for an aberration occurring once or twice, but if the defaulting continues there might be some serious repercussions for the borrower.

Let us get to know the consequences of defaulting on a loan repayment installment.

  1. Negative credit score
When a personal loan EMI defaults, it leads to a drop in the credit score of the borrower, which impacts his creditworthiness negatively. Nowadays, an individual’s credit history is available to all financial institutions so that they can assess the individual's credit profile before providing them with products like personal loans.

  1. Late Fee and penalties
It is clearly mentioned at the start of the loan that in case the borrower fails to repay the EMI on time, there would be additional charges and interest levied over and above the EMI. This can bring more financial crunch to the current situation of the borrower.

  1. Legal implications
Even after repeated demands, communication and warnings, the financial institutions would take up the matter to the courts and initiate legal proceedings against the borrower to recover the dues. In most cases, the courts can allow the financial institutions to take control over the collateral or summon the loan guarantor who had signed the documents at the time of availing the personal loan.

  1. Acquisition of collateral
In secured loans such as home loan, gold loan or vehicle loan, the financial institution has the authority to acquire the collateral against the repayment of loan. When the borrower fails to make payment within the credit notice period, the financial institution may proceed with the possession of the collateral.

  1. Reduced eligibility for future loans.
As we are now aware that any default in the loan EMI will hamper your credit score and create a bad review of repayment. This can damage credibility and may cause difficulties while availing any loans in the future. A person with a negative credit score can never get any loan of any kind from any financial institution.

  1. Repeated calls and visits from the collection agents.
A personal loan can be exciting at the time of availing and spending, but when a default happens the borrower needs to be ready to face the financial institution officials. The borrower may receive several phone calls or visits from the collection agent until he repays the EMI.

According to Zavron Finserve, a registered non-banking financial a company that offers a personal loan in Nagpur along with other diversified loan portfolio, it is crucial to plan your repayment even before availing a loan of any kind. While Zavron offers the lowest interest rates on personal loans in Nagpur, making it easy for the borrowers to repay easily and on time, it is still advisable to make sure that you have the repayment capability before borrowing to keep your credit history intact.

Conclusion
Never take a personal loan without analyzing your repayment capability. While availing personal loans in Nagpur has been made easy by Zavron Finserve with attractive interest rates and easy repayment schedules, always ensure that you repay the EMI on time to avoid bad credit score marring your future borrowing prospects.


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