Missed 3 EMIs can bank ask to pay full amount

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THE consequences you may face for not filling the EMI are

Your CIBIL Score takes a toll

Missing a mortgage payment weighs very high on your credit score.

If there is a negative comment in your report from Credit Information Bureau of India Limited (CIBIL), a leading credit score rating agency in India, it is not a welcome sign.

To what extent it affects your score is dependent on repayment track record.

The more payments you have missed in the past, the more your score gets hurt.

But one could easily expect a 50-70 points going down for missing a mortgage payment.

You become a risky borrower

Losing 50-70 points on your credit score doesn’t mean much, from a larger perspective. But the fact that there is a comment on your CIBIL report that you have missed a mortgage payment could lead to a frown on your prospective lender’s face.

You just become a risky borrower.

Think about it, would you lend money to a friend who you know has defaulted payments in the past? Only in this case you are not lender’s friends but a customer.

Late payments and penalty

Lender normally charge 24 per cent per annum interest on the amount due as penalty for delay in payments. So whatever you do, never delay your mortgage payment.

If you have no choice but to delay, we still advice you to pay off as soon as possible and still bear late payments charges and penalty interest on days past due, but not to miss a payment.

Healing time

We just now told you that one missed payment can stay on for about seven years. But it will heal after that. So you score will be repaired with time.

While paying off a debt is huge responsibility, the satisfaction one gets after clearing a loan is immense. When once we enter a mortgage, we should always look forward to closing it.

Advocate Siddhant Sharma LawRato