Home loans are often for longer tenures. These loans are of huge amount, which the borrower repays gradually in installments ie EMI. Many times, due to some unforeseen circumstances or other financial crises, people miss paying EMIs. If there is such a lapse on isolated occasions, it can be managed, but not being able to pay the EMI again and again can have a very bad effect. Let us know what are the bad consequences of home loan EMI default…
Credit score
Piramal Finance MD Jayaram Sreedharan said that an EMI default Due to this, the credit score of the person taking the loan often falls. Since credit score is an important factor in an individual’s home loan eligibility, such a default can make it very difficult to get another home loan or any other loan.
Impact on fellow applicants
< p>The impact of such loan default is usually on associate applicants as well and it is not limited to the main applicant only. Default in payment of EMI lowers credit score, which can create difficulties for co-applicants ranging from employment to house rental.
Heavy late payment charges
Jairam Sreedharan said that people pay attention to the lowest interest rate while taking loans, but ignore other charges. One such significant charge is the late payment penalty, which means penalty for not depositing the EMI on time. This fee varies from bank to bank, so it is important to consider it while taking the loan.
Top-up and other loans
If the loan One can choose from various loan options in future such as top-up loan, personal loan, contingency loan, home construction loan, home improvement, expansion loan if the borrower maintains a good track record of EMI payments. And a single EMI default can make these offers go away from you.
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