If you miss an EMI payment on your property loan, the consequences can vary based on your lender's policies and the number of missed payments. Here’s what typically happens:
1. Late Payment Charges
Banks impose a late payment penalty, usually 1% to 3% of the EMI amount.
Some lenders charge a flat late fee instead.
2. Impact on Credit Score
Even a single missed EMI is reported to credit bureaus (CIBIL, Experian, etc.), reducing your credit score.
Multiple missed payments can severely impact future loan approvals.
3. Increase in Interest Costs
If the EMI is not paid on time, interest continues to accrue, increasing your overall loan cost.
4. Legal Action & Possession (For Repeated Defaults)
After 90 days of non-payment, the loan is classified as an NPA (Non-Performing Asset).
The bank may issue a legal notice and initiate recovery proceedings.
Under the SARFAESI Act, the lender can auction your property after proper notice.