If you are not able to pay the home loan EMI on time in any month, then there is no need to panic. Many times this happens in situations like salary delay, sudden increase in expenses or medical emergency. As soon as the due date of EMI comes, the bank’s system starts showing your account as overdue. Initially you are reminded through message or email. If there is a delay of a few more days, the collection team of the bank can call and ask the reason.
The bank imposes late payment charge or penalty interest on this delay. This amount varies according to the bank and loan agreement. Generally this is added as additional interest on the outstanding EMI. The more days the delay, the higher the charge. Therefore, in case of delay, it is wise to make payment immediately.
Does CIBIL score deteriorate immediately?
Often people fear that if the EMI is delayed one day, the credit score will fall, but generally banks send the information to the credit bureau only if there is a delay of more than 30 days. If you repay the dues within a month, it does not have much impact. Yes, if EMI starts getting late again and again, your CIBIL score can drop rapidly and it can be difficult to take a new loan in future.
Can the bank take possession of the house?
In case of a missed EMI, the bank neither sends a legal notice immediately nor takes possession of the house. According to banking rules, if payment is not made continuously for 90 days, only then the loan is considered NPA. Only after that the further legal process starts. That is, one month’s mistake does not pose a risk of going home, but continuous carelessness can prove costly.
What to do in such a situation?
If EMI is missed then first contact the bank and tell the exact reason. Try to deposit the amount including penalty as soon as possible. If the problem is prolonged then options like re-scheduling or moratorium can be discussed with the bank. Open dialogue often leads to a solution.
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