EMI Bounce: Many times, if financial condition is not good, it is not possible to pay home loan EMI every month. Due to this, many times the home loan installment is missed. In such a situation, today we are going to tell you in our news that what will happen if there are three consecutive EMI bounces…?
To fulfill their dream of owning a house, people take home loan, which has to be repaid along with EMI every month. However, sometimes it is not possible to pay home loan EMI every month due to poor financial condition.
Due to this, many times the home loan installment is missed. In such a situation, what will happen if three consecutive home loan installments are missed? It is very important to know this, because it can save you from many problems.
If the first EMI is missed-
If the first EMI of the home loan is missed, the bank will send you a reminder through SMS and email to pay the installment. The reminder may also contain a link asking you to make payment. However, its authenticity should be checked, because it can also be fake. The lender can also impose a penalty of 1 to 2 percent for late payment. Once the payment is made, the loan account becomes the same as before.
What will happen if the second payment defaults?
If the second EMI is not paid on time, the bank will be asked to pay the home loan installment along with penalty. Also, depending on your financial condition, you may be given some time to pay this installment. If the second installment is not paid, the bank will alert you that if the third EMI is missed, legal action can be initiated. In such a situation, if you are financially capable then you should pay two installments immediately.
What happens if the third EMI payment defaults?
If you miss the third consecutive installment of any home loan, the bank will keep sending you repeated reminders for payment. However, if you do not make EMI payments for more than three months, 90 days, the lender will initiate proceedings to auction your property to recover the outstanding amount.
According to Adil Shetty, CEO, Bank-Bazaar.com, “On delayed EMI, the first action that a lender normally takes is to impose a penalty of 1 -2 per cent per month on the outstanding EMI. If you commit a major default, the lender will recognize your loan as NPA and initiate the recovery process. However, before taking this action he will send a notice.
What will be the effect of late payment?
If you miss EMIs by more than 90 days, the lender will initiate proceedings to auction your property to recover the outstanding amount. Also this delay will become NPA, due to which your credit score will reduce rapidly.
