Life is full of changes and throws curveballs when we least expect them. Unfortunately, we aren’t all like Viru who smashes a six on the first ball of Brett Lee even in test matches, right? One such roadblock could be defaulting on a personal loan.
This can happen because of any reason – lack of funds, forgetting to pay, etc. but the solution is to take action before it happens. If you have ever missed out on paying an EMI or are struggling to pay back your loan, it’s important that you read on to know what steps you can take to rectify the situation and prevent yourself from spiraling into a debt trap. Before that, let’s find out what happens when you miss out on an EMI.
Missed an EMI?
EMIs are the ideal repayment method to clear off debt within a stipulated time frame. Just like any other loan, personal loans also come with an agreed-upon tenure and interest rate. Ideally, you should check what your EMIs will be using a personal loan EMI calculator to understand if the monthly amount suits your affordability. Therefore, it’s important to understand the amount you will need to pay every month until the tenure completion.
If for some reason, you miss out on paying the EMI, because of a lack of funds, then your EMI will not be successfully debited from your account on the due date. The next thing that happens is that you will receive a reminder in the form of a text notification or an email notification with your bank information about the declined payment and to clear your dues.
In a few cases, banks provide a grace period to clear the EMI, but after the grace period is over, the bank charges you the late fee. Do note that if you continuously miss more than 1 EMI, your name will be added to the defaulter list.
What to do when you miss an EMI?
If you ever find yourself in a tight spot like this, here are a few things you can do –
– Ask for help: Fussing over the missed payment will do no good. If you have not paid your EMI, speak with your bank and get with your loan officer. Explain the reasons for your missing the payment.
For valid and unavoidable circumstances, such as medical emergencies, your bank may offer some assistance in the form of deferred payment and allow you to make the payment via the internet banking app in the following month. However, you must ensure to make 2 EMIs on time the following month.
– Ask for an extension: If you feel you may miss out on paying your EMIs in the following months due to an emergency at home or an unavoidable situation (loss of job, pay cut, etc.), still connect with a bank officer and discuss a solution for this problem. You can even request to restructure your plan which will give you relief and your bank the belief that you are sincere with your repayment process.
– Get a loan against investment: If you know you will not be able to make the EMI, the next step is to take a loan against your investment such as a fixed deposit, etc. with your bank, at a lower interest.
While you do have a few options at your disposal, the best thing to do is to create an emergency corpus for situations that can get you into financial hardship. So, when you see a bouncer, you will know how to hit it out of the park!
