Importance of Paying Personal Loan EMIs on Time
In the lives of most people in this world, there comes a situation that you need to take a loan. It can be any loan such as car loan, home loan or a personal loan. You can use the loan amount in any personal expense. This can be medical, weddings, buying properties or any other need. A personal loan can be incredibly helpful. This is the one loan which you can use any way you want. It's also an unsecured loan. All you have to do is pay the personal loan EMIs on time.
But in some cases, due to certain constraints, the borrowers are unable to pay personal loan EMI on time. In these cases, the borrower becomes a defaulter. This can affect the credit history of the individual.
If you have missed your EMIs, don't worry too much. You can still save your credit score. The institution from which you have borrowed the personal loan will provide you a few months to pay off the loan. There may be some cases where you can't pay the outstanding amount with the buffer time provided by the concerned financial institution. When this happens, the process of recovering the outstanding amount of the personal loan starts.
How to Pay Personal Loan EMIs on Time?
When you take a personal loan, make sure that you repay the personal loan on time. This ensures credit history remains good. That can help you to get other loans easily. But in case you become a defaulter, you don’t have to panic. Do the following things and it can help you resolve issues about the delay or lapse of installments. Otherwise, you need to face personal loan default consequences in India. This can have a bad effect on your credit history.
Let the Financial Institution Know About the Delay
If you're unable to pay a monthly installment on time, contact the lending institution and let them know the reason for the delay. If you can repay the installment, a workable condition can be carved out by the institution.
Restructure the Personal Loan
You can also ask the bank to restructure the loan. Restructuring of a loan means the installment amount is lowered for each month. This increases the tenure, and ultimately, the interest that you pay. But that's something that can be easier for you since you're not paying a heavy installment every month.
Deferring the Loan Payment
Deferring payment is the situation when both parties i.e., borrower and lender decide to stop payment for a period of time. But the financial institution may charge a penalty for the duration the payment has been held. After this period, the borrower can continue with the normal installment process. This can be helpful if you're facing a short crisis that you need some relief from.
One-Time Payment for Settlement
If you become a personal loan defaulter and don’t want to continue with the loan, you can ask the bank about one-time payment and settle the loan. When you apply for this, the institution might cut some charges. They'll provide you the amount that you have to pay as a one-time settlement.
Convert Personal Loan into Secured
As the Personal Loan is an unsecured loan, you can ask the lending house to convert the loan to a secured loan. When the loan gets converted into a secured loan, the institution is assured that you'll repay the outstanding amount. This is because you've provided security for the loan. That gives them confidence that you'll repay the loan to avoid losing ownership over the collateral.