What will be the penalty for not paying home loan EMIs? What will be the impact on CIBIL? Learn the bank's rules..

If you're unable to pay your home loan EMI on time for a month, there's no need to panic. This often happens due to salary delays, unexpected expenses, or medical emergencies. As soon as the EMI due date passes, the bank's system starts showing your account as overdue. Initially, you're reminded via text or email. If the delay is even a few days longer, the bank's collection team may call and ask the reason.

The bank levies a late payment charge or penalty interest for this delay. This amount varies depending on the bank and the loan agreement. It's usually added as additional interest on the outstanding EMI. The longer the delay, the higher the charge. Therefore, it's wise to pay as soon as possible.

Does your CIBIL score immediately suffer?
People often fear that a single day's EMI delay will cause a drop in their credit score, but banks typically only report information to credit bureaus if the delay is more than 30 days. If you pay the balance within a month, it won't have much impact. Yes, if EMIs are repeatedly late, your CIBIL score can drop sharply, making it difficult to obtain a new loan in the future.

Can the bank repossess the home?
Missing an EMI doesn't immediately send a legal notice or take possession of the home. According to banking regulations, a loan is considered NPA only if payments are not made for 90 consecutive days. Only after that does the legal process begin. This means that a one-month delay doesn't result in losing the home, but continued negligence can be costly.

What to do in such a situation?
If you've missed an EMI, first contact the bank and explain the reason. Try to repay the amount, including the penalty, as soon as possible. If the problem persists, you can discuss options like rescheduling or a moratorium with the bank. A frank conversation often leads to a solution.

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