If you have not been able to pay the home loan EMI, then know what can be the disadvantages

muskan sSeptember 17, 2024

0 2 minutes read

Buying a house is a big achievement, but many people who buy a house through a home loan can face problems in paying the EMI on time. Due to rising interest rates, inflation, and unexpected financial problems, it becomes difficult to repay the home loan EMI. In this article, we will understand what can be the effect if you miss the EMI and what important aspects should be paid attention to.

1. Financial penalty
If you miss your home loan EMI, many lenders charge you a hefty penalty. Initially this amount may seem small, but over time it can become large. The penalty is usually a small part of the EMI, but if you have repeatedly delayed the payment, this penalty can become a big problem.

2. Impact on CIBIL score
Your CIBIL score reflects your creditworthiness. This three-digit number evaluates your loan history. Missing an EMI can negatively affect your CIBIL score. A high CIBIL score helps you get more loans in the future, but this score can fall if you miss EMIs, which can make it difficult to get new loans.

3. Risk of house seizure
The house is kept as collateral in a home loan. If you do not repay the loan EMI on time, the bank has the right to seize your house. The bank can recover its dues by selling this seized property. In this situation, not only can you lose your house, but you may also get a financial and emotional shock.

4. Challenge in loan transfer
If you want to transfer the loan after missing the home loan EMI, then this can also be challenging. Although moving to a lender with a lower interest rate can be a good solution, but the new lender may reject your application if you miss the EMI. The new bank may have difficulty giving you a loan due to the risk associated with you.

5. Possible legal consequences
If you keep defaulting on EMIs for a long time, you may be subject to legal action. To avoid such legal problems, it is better to get in touch with your bank and discuss redressal measures. Banks can also provide financial tools to make your repayment plan more feasible, which can provide you relief.

6. Steps towards resolution
If you are facing difficulty in repaying the loan, contact your bank in time. Banks can suggest you better solutions, such as rescheduling EMIs, reducing interest rates, or increasing the loan tenure. With these measures, you can manage your financial situation and avoid becoming a defaulter.