What happens if I miss home loan EMI ..? The common man is also realizing the art of owning, the main reason for which is the easy availability of home loans at low interest rates.
With lenders coming forward to lend up to 80 to 90 per cent of the value of the home, more and more people are interested in taking out home loans as they have the opportunity to repay on a monthly installment basis.
There will be no hassle when taking a home loan as long as the monthly EMI payments are paid off regularly.
But in the long run there may be financial difficulties at some point. Now let's see what kind of difficulties can arise if EMI payments are not made for one or two months at such a time.
Penalty for late payment of EMI
Failure to pay the EMI on time for one or two months may result in imposition of penalties under late fees.
It is possible to charge from one per cent to two per cent on the EMI that these fees normally pay.
However, depending on the circumstances, in some cases interest may be charged on the outstanding amount for the entire default period. This is in addition to the usual late fees charged by banks.
If home loan EMI not paid Impact on Credit Score
Delay in payment of a single EMI installment will be recorded in your credit score. Credit score may drop by 50-70 points.
This will have an effect on your future debt. However, it is advisable to repay the missed EMIs within 90 days with late fees.
Taking timely corrective action like this can ensure that the credit score is not overly affected. In addition to paying for missed EMIs, care must be taken to ensure timely payment of appropriate EMIs.
Bank auction properties for sale
If your arrears are not repaid after 90 days, add them under the NPAs. Remember that banks can auction off your house to recover the arrears. Contact the lender to avoid such a situation and try to resolve the issue.
What happens when you default on a home loan How to fix ..?
The lender may be asked to reduce the EMI to avoid a home loan default. EMIs may require a non-payment period for a short period of time if the income stops due to loss of employment or temporary suspension of business activities.
In such cases it is possible for banks to allow EMIs to give a break without paying for three to six months. However, interest will be charged on the loan amount due for this period.
Tips on home loans for first time buyers
Making partial payments is another option to reduce the EMI burden. This can be done using the home loan overdraft facility. You can reduce the financial burden to some extent in case of financial difficulties by depositing an additional amount in the account in addition to the EMI whenever you have surplus funds available.
