How Missed Personal Loan EMI Can Impact Your Finances?
Let’s say you’ve already taken out a personal loan with a tenure of close to 5 years to cover an emergency or for something else. Since we live in uncertain times because of covid, you may find that you can’t pay one of your EMIs because of something out of your control. You can’t say enough about how important it is to pay back your loans if you don’t want the bank to think of you as a risky borrower.
If you don’t make an EMI payment when it’s due at the applicable Paytm personal loan interest rate, you will be called a defaulter. Even though you hope for the best, you should be ready for the worst. If you’ve taken out a personal loan or one from another financial institution, it’s important to know what will happen if you don’t make your EMI payments and how you can avoid this. Also check: Paydayloansnz.co.nz
Your creditworthiness goes down.
Did you know that your credit score can drop if you miss just one EMI payment on a personal loan? Not only that, but most lenders look at the borrower’s credit report to see how they have paid back loans in the past and if they have ever missed payments. If you decide to get a personal loan or any other kind of loan in the future and your previous bank has marked you as a high-risk borrower, not paying your EMIs on time could be one of the reasons why your loan application is turned down. When in a dilemma, you can contact Paytm personal loan customer care number for advice.
Costs and penalties
People who don’t make their EMI payments on time are charged late fees by personal loans and other financial institutions that offer personal loans. It is usually between 1% and 2% of the amount of the EMI that is due, and other fees add to the loan balance. This makes the total amount you have to pay much more than what you owe to begin with, which you can confirm by contacting the Paytm personal loan customer care number.
If you don’t pay back your personal loan or any other personal loans you may have taken on time, the total amount you have to pay back will go up because you’ll have to pay more in interest and fees.
Harming the credit score of your co-signer
If your credit score was low at the time you applied for a loan, the bank might ask for a co-signer or guarantor. When you don’t pay your monthly instalments on a personal loan, you will also hurt their credit score.
As we’ve seen, if you don’t pay your personal loan payments on time, your credit score and creditworthiness will go down, and it will also cost you money. Here are a few things you can do to avoid similar situations in the future.
Plan it better
Most of the time, a borrower can’t pay their EMIs because they can’t figure out how to budget their money, and their hesitation to approach the Paytm personal loan customer care number for help. To avoid not being able to pay your Personal loan EMIs, you should plan your money better and make cuts where they are needed.
If you need to, you can ask for a lower EMI.
A borrower might find it hard to keep paying their EMI if something unexpected happens, like if they have to pay for medical bills or lose their job. In this case, the borrower should go to the bank and tell them about their current situation. Most of the time, banks lower EMIs by making an unsecured loan into a secured loan or by extending the length of an existing loan.
Opt for part payments
One of the best ways to make EMI payments and Paytm personal loan interest rates easier to handle is to pay them in parts. If you have a business that brings in more money than you need, put some of that money toward your loan.
The 50-50 rule says this.
Personal loan EMIs need to be paid on time, which means the borrower needs to be good with money. This means that you should think about your personal loan payments and Paytm personal loan interest rate before you take out the loan, and you should never choose an EMI that is more than 50% of your monthly income.
Start putting money aside for emergencies.
A lot of the time, people miss their personal loan payments because of things that are out of their control. To make sure you have enough money to pay for an emergency while you have a personal loan, you should have an emergency fund that you can use. The emergency fund should have enough money to cover about six months of your salary. This way, if something unexpected comes up, you won’t fall behind on your Personal loan EMIs or any other personal loan you have. Also, still, if you require help, don’t forget to connect with the Paytm personal loan customer care number for assistance.
Ask your friends and family for money to help you out.
If you can’t pay your monthly EMIs, ask your close friends and family for an interest-free loan to help you pay them back. This way, your credit score won’t go down, and the bank will still see you as a good credit risk.
Defer paying EMI
If you haven’t paid your EMI for a month or so at the applicable Paytm personal loan interest rate but think you’ll be able to pay it all at once in a few months, talk to your bank about it. Most personal loan companies will probably agree to let you pay your EMI over the next few months, but you will be charged a late payment fee. They might also let you only pay the interest for a couple of months. You can check with Paytm personal loan customer care number to enquire about the same.
The effects could be both financial and bad for your reputation. In terms of money, you will have to pay late fees, penalties, and other fees. Even worse is the damage to their reputation. Your credit score can drop a lot after just one missed payment. Also, it could stop you from getting any more credit. Nevertheless, at least approach your lender for a possible solution; they may even lower your Paytm personal loan interest rate.