You may understand the amount of the EMI process where you need to pay some part of your loan in the form of EMI which is mostly monthly payments. Many people like to choose the EMI option to finance the product they want to own. You may have always a chance to Skip a Loan EMI Payment which can lead to consequences.
You need to always focus on repaying the loan amount to avoid missing any payment that may have an impact on your financial record. Many people fail to repay their loan amount which results in a Loan EMI Bounce that can affect your financial record and different results can be observed. However, it may depend on the lender’s action and the law made for such an offense.
Loan EMI Bounce
People don’t usually like to avoid their EMI payments to face different legal action. However, people may fail to repay their debt at a specific time which causes Loan EMI Bounce that affects their credit score and future loan ability. Moreover, relevant financial institutions may also take some legal action based on existing law.
So, you need to be careful and collect knowledge like what happens when you fail to repay or about your rights even if you skip the EMI payment. This article will help you to understand the Loan EMI Bounce and the relevant consequences that can affect your financial ability. This article will also inform you about your rights as a borrower when you fail to repay your loan amount on time.
Understanding Loan EMI Bounce
People generally take loans to afford some products or services that are not financially possible to pay by themselves. Therefore, they take the help of financial institutions like Banks to lend some amount against some interest rate that pre-decided with agreeing with borrowers. It includes repayment of the loan amount in certain intervals that generally include monthly payments. Loan EMI Bounce occurs when people fail to pay their loan amount.
- In such cases, banks take significant steps where they follow the rules and legal process to get their money back.
- Your will to pay or your financial situation will also be considered as a factor while taking legal action against the EMI Payment Failure.
- Banks have different approaches to recovering their payment using different steps based on the borrower’s loan amount and repayment capacity.
- However, you may also face certain penalties for seeking your loan payment where you need to pay a fine for it.
What are the Potential Reasons for EMI Bounce?
It is essential to be aware of some common reason that causes skipping the repayment or failure to repay the loan amount. This can help you take the proper initiative to meet the criteria and pay your potential loan amount on time. So, go through the list of Potential Reasons for Loan Repayment Failure to avoid action and pay your EMI on time.
- Technical error: There can be a chance of technical glitches or issues in the bank system that may cause failure to pay your EMI payment.
- Insufficient Funds: It is a common mistake that happens with people who fail to maintain sufficient balance in their bank account that is listed to repay their debt. So, failure to pay can cause a Loan EMI Bounce which has different consequences.
- Incorrect Bank Details: You need to cross-check the bank details that are provided to pay your loan amount. Sometimes, wrong details cause failure to pay your EMP amount causes consequences that you did not expect.
Loan EMI Repayment Failure Consequences
Different reasons may cause failure to repay your debt amount with a bank that may lead to get some warnings or major consequences. It can be based on different factors like willing failure to repay or having potential reasons. However, having information about potential Consequences of Loan EMI Repayment Failure can allow you to understand why you should not avoid repaying your debt. It also informs you what possibilities can occur that will affect your daily life and focus on your business.
- Decline Credit Score: Failure to repay the loan amount or skipping your loan amount may affect your CIBIL Score Number. It is important because banks consider this before approving your loan application. A higher credit score will provide a higher potential to get loan approval whereas missing repayment can lower your credit score which can lower the chance to get loan approval.
- Bounce Charge: An individual who fails to repay their loan amount may be required to pay a fine for it. Lenders have the right to charge a fixed fee or percentage of EMI amount as a penalty.
- Increased Interest and Late Fees: Lenders may charge your late fees or increased interest rates on the EMI payment which can cause a financial burden. It will also increase your financial loss due to Loan EMI Payment Failure after skipping or losing to pay your EMI on time.
Rights of Loan Borrower in Case of EMI Bounce
Even if you fail to repay your loan amount, still you have some rights provided by law to protect borrowers. Therefore, you should know about the Loan Borrower Rights even if EMI bounces. The following points can help you to understand and use them to protect yourself.
- Right to Get Proper Notice: The Bank has the responsibility to inform about the dues to borrower with a legal notice regarding the missed EMI payments. You will get a sufficient notice period to clear your dues.
- Right to get treated with civility: According to law, banks are not allowed to share your loan details with other parties. Moreover, you will not be treated by using abusive language, yelling, or any physical intimidation. In case of violence or other unlawful action, you have the legal right to file a complaint against them.
- Right to know about the recovery agents: It is essential for people to know the details of the recovery agent sent by the banks. Sometimes, banks hire recovery agents to receive their money from borrowers who have defaulted. Borrower Rights Exist to know about the recovery agent who came to receive the bank loan amount.
| Homepage | KeralaCoBank.Com |
Samarth Choudhary is a Chief Editor at keralacobank.com. He has overall editorial experience of 10 years in online media. He has completed his graduation from University of California and masters in Finance from University of Dallas in year 2010. His major interest and expertise is in Finance, Taxes, Government Aid and Schemes. His Major focus is to help users to get relevant information which are published on keralacobank.com in easy and precise form.