The EMI is a convenient method for repayment of credit; after receiving the loan from a Bank/NBFC, it is the prerogative of the applicant to ensure a timely repayment. An EMI default can cost dearly as besides paying an escalated interest, the return will always reflect in your CIBIL and banking history.
The pointers enumerated below will help maintain a clear repayment record and help you avoid any EMI default.
The monthly installment or EMI amount is deducted from the bank account via the ECS mandate. The date for the ECS to hit the account is fixed and mentioned clearly in the loan agreement; potential dates could be the 5th to the 10th of the month.
Banks follow a standard procedure to issue a date for the EMI payment. The lender considers the salary credit date to schedule the EMI for salaried individuals. Self-employed persons have the 10th of each month as the EMI due date.
Lenders may give a pre-alert for the EMI due, but the loan holder’s responsibility is to be aware of the EMI due date and make sure there is sufficient balance in the account to clear the EMI before the date. Ignoring this may result in a EMI default under your name.
An EMI for a loan is fixed at issuance; The applicant should be confident that the EMI can be easily accommodated in the monthly budget when receiving the loan. If the EMI is not affordable, it is better to request a longer tenure or look for a lower cost of funds.
Once accepted, the client must stand by the commitment to repay the monthly amount with interest. You can use our EMI calculator to estimate your monthly repayment amount.
Business compulsions or employment shifts can initiate a change of Bank in any such circumstance the loan holder must maintain the requisite balance for the EMI to be paid. If the nominated account is discontinued, the lender must be intimated in advance and the request forwarded for a fresh ECS mandate with the details of the new account.
This should be done well before the EMI is presented to the previous account, as if returned unpaid the repercussions cannot be reversed. In this case an EMI default will not only result in monitory losses but it would also impact your CIBIL score respectively.
When finalizing a monthly budget, all EMI to be paid must be factored in the list of mandatory expenses unplanned expenses or emergencies cannot be borne at the cost of the repayment to be made for credit.
Provision should be made in advance and funds kept aside if such a need arises; individuals have the option of applying for a top-up loan, if required.
A personal loan is a convenient method of acquiring funds in an emergency, processed based on documents readily available at hand. Funds are generally received within five working days after applying. The amount can be used for any personal expenses helping to tide over a shortage to clear pending dues.
Unsecured funds and secured credit are issued based on the credit score; therefore, it is worth the while to keep an on-time EMI repayment track to secure further credit when required.
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