Missed A Personal Loan EMI – What Should You Do?

Learn how to manage personal loan EMIs and avoid missed payments. Discover tips for planning, researching lenders, and using EMI calculators to make informed decisions.

22 Jul,2023 06:55 IST 2083 Views
Missed A Personal Loan EMI – What Should You Do?

Personal loans are offered to a borrower without having to put down any collateral. This may seem an easy way out during a financial emergency or an attractive way of financing a dream holiday. However, before opting for a personal loan, you need to be sure that you are in a position to pay the personal loan EMIs regularly. Missing EMI deadlines affect your credit rating. This in turn affects your ability to avail loans in future as well as the interest rates lenders offer you.

Perhaps the first thing to do to avoid missing a personal loan EMI is to plan your personal loan well. Calculate your spare income with which you will pay the EMI. It is always a good practice to keep a buffer between spare income and EMI in order to have some ready cash available for further contingencies. Thus, if you have calculated a spare income of INR 10,000/-, do not commit the entire amount to EMI payments for your personal loan.

The second thing you may find useful to do is research and zero in on the lender that is offering the most advantageous personal loan interest rates and allied terms and conditions. Thirdly, there are several platforms offering personal loan EMI calculators online. Key in different interest rates and loan terms. The EMI calculator for personal loans will then tell you how these different interest rates and tenures affect your personal loan EMI.

But what if, despite your best efforts you are faced with such a contingency that you are forced to skip a personal loan EMI. Here are some of the things we recommend you do to lessen the impact on your credit score.

Zaroorat aapki. Personal Loan Humara
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Contact Your Loan Officer:

Reach out to the Loan Officer as soon as you become aware that you will not be able to pay the EMI on time. It is best done before the EMI due date. If you have a genuine reason, the bank or NBFC may show some leniency and offer you a payment holiday. This usually comes with some charges and penalties. If you feel that the cash crunch preventing you from paying your EMI could continue for some time, negotiate for restructuring your loan. The lender could increase the term of the loan and lessen the EMI. Alternatively, you could ask for a top-up to your loan. Many lenders will agree to a top up only if you have already successfully completed payment of 6 EMIs or more.

Seek A Fresh Loan:

You could also consider seeking a fresh loan by putting up a collateral such as gold, or securities. Such loans come with lower interest rates than personal loans. However, keep in mind that while a fresh loan will mean loan processing charges all over again, delayed EMIs mean penalties and a downgrade of your credit score.

The Loan Settlement Option:

In the unfortunate circumstance that you find yourself with your back to the wall, and are simply not able to pay your EMI, even at a later date, request your lender to grant a loan settlement. This is only granted in extreme cases, if the lender is convinced you have very genuine reasons for not repaying the entire loan. A settlement may be granted on part of the loan amount while you will have to pay the remaining part.

Getting a personal loan is relatively easy today with several platforms offering online and instant approvals. However, it is best to take it only if absolutely necessary and after carefully assessing your ability to pay the EMIs on time.

Zaroorat aapki. Personal Loan Humara
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Disclaimer: The information contained in this post is for general information purposes only. IIFL Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. Given the changing nature of laws, rules and regulations, there may be delays, omissions or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Gold/ Personal/ Business) loan product specifications and information that maybe stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Gold/ Personal/ Business) loan.

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