Personal Loan EMI: Sometimes a big problem starts with a very small thing. Due to financial constraints, you miss an EMI, thinking you will catch it next month. But gradually the remaining bills accumulate, late charges are imposed and collection calls start coming.
Loan is not just a question of amount; It is also an experience of stress, anxiety and feeling helpless. Let us understand how harmful unpaid EMIs and loans can be for you.
whirlpool of debt
When you miss EMIs, lenders automatically levy late charges and penalties. The interest keeps increasing, meaning your total debt grows rapidly. Even small mistakes can turn into a whirlwind of debt over time. Additionally, your credit standing gets affected, making it difficult to get a new loan.
mental pressure
Debt is not just a financial burden, it also brings mental pressure. The stress of paying late EMIs can lead to lack of sleep, mental fatigue and impact marital life. Frequent reminder calls from the bank or collection agent also create additional stress. Gradually people start feeling embarrassed or depressed, even if the loan is taken for a legitimate reason. Such as studies, illness or household needs.
why do people get stuck
Rising expenses, irresponsible use of credit cards and personal emergencies are the most common reasons. Many times people do not understand the interest rate properly, especially on credit cards or high-rate personal loans. With poor planning, even manageable debt turns into a headache.
way out of debt
The first step is to be honest. Acknowledge the debt and assess your situation. Talk to creditors and explore restructuring options. Like long EMI term or low EMI. Do not take a new loan to repay the old loan, as it can increase the problem.
Second, be strict with your budget and pay off high-interest debts first. The help of a financial counselor can also be helpful in clarifying the direction.
Frequently Asked Questions (FAQs)
Q1. What will be the impact on credit score if I miss an EMI?
A default is reported to the credit bureaus, which lowers your score and makes it more difficult to get a loan in the future.
Q2. Can creditors take action against me?
Yes. Prolonged non-payment may trigger a legal notice or recovery proceedings, depending on the loan product and amount.
Q3. What’s the best way to deal with mounting debt?
Stop taking new loans, negotiate restructuring with lenders. Give priority to high-interest loans in your repayment plan.
Also read: Personal loan: Personal loan will be available even with low credit score, just keep these things in mind