Is There Higher Personal Loan Interest if I Missed my EMIs?
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Is There Higher Personal Loan Interest if I Missed my EMIs?

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Nowadays, we live in a highly commercialized world and a modern, often expensive lifestyle is required to match what the world offers. However, that may not always be easy if you don’t have enough funds to fulfil such needs. Thankfully, you can easily avail of an online Personal Loan these days for almost any requirement. 

Let’s check out the top features and benefits of an online Personal Loan!

Top Advantages of Availing of an Online Personal Loan

Here are some of the biggest advantages of getting an online Personal Loan:

  • No Collateral Required – Online Personal Loans are collateral-free. You don’t need to put up any asset as security to avail of the loan. 
  • Flexible Loan Repayment – The loan repayment tenure of most Personal Loans is quite flexible. Some NBFCs even offer an online Personal Loan with a repayment tenure of up to 60 months.
  • Simple Eligibility Criteria & Minimal Documentation – Most Personal Loans offered by online lenders have simple eligibility criteria and only require basic documents.
  • No Restriction on End-Usage – Personal Loans are multi-purpose and have no limits on end-usage. This means you can avail of this loan for almost any purpose.
  • Quick & Hassle-free Process – The entire loan process from application to disbursal is seamlessly conducted with an online Personal Loan. 
  • Competitive Interest Rates – You can do your research to find the best Personal Loan interest rates. This can help you determine your EMIs for loan repayment.

Read More – रु. 30,000 वेतन के लिए पर्सनल लोन

Which Factors Determine the Interest Rate of a Personal Loan?

Certain factors can affect the interest rate of a Personal Loan, such as:

  • Income – Your income is another factor that can affect the interest rate on your Personal Loan. A low income may lead to high-interest rates while a high income can lead to slightly low-interest rates.
  • Lender-Borrower Relationship – Your relationship with any past or current lending institution can also determine the interest rate on your loan. A long-term association represents loyalty, which can create a favorable image among Personal Loan lenders.
  • Credit Score – Your credit score is denoted by a three-digit number between 300 and 900. A credit score between 500-700 could result in higher interest rates as this score is not considered very healthy. Alternatively, a high credit score above 750 is considered excellent by lenders and can help you get low-interest Personal Loans.
  • Credit History – Your credit history includes all your past debts and debt repayment. If you repay your debts on time, it can lead you to find better Personal Loan interest rates.
  • Defaults – If you happen to default on the payment of any previous loan, it could affect your interest rate. You might get charged a high-interest rate on a new loan.

Does Missing an EMI payment Lead to Higher Personal Loan Interest Rates?

EMIs are a convenient way to repay a loan easily. However, there could be several factors that can lead you to miss a payment or two. Let’s find out what happens if you miss an EMI payment on your Personal Loan:

  • Impact on Credit Score – Even if you miss a single EMI payment on your loan, it can lower your credit score. Therefore, it is important to always repay your loans on time as per the agreed-upon terms. 
  • Creditworthiness Affected – Your creditworthiness is determined by your ability to repay any debts on time. Missing EMI payments can significantly impact your creditworthiness.
  • Penalties – if you miss an EMI payment, you are likely to be charged a penalty. This can be in the form of an additional interest rate as levied by the lender or lending institution.

How to Avoid Defaulting on Personal Loan EMI Payments? 

Here are some tips you can follow to avoid defaulting on your EMI payments:

  • Plan Your Finances – It’s important to plan your finances well in advance, so you know your monthly budget and pay your EMIs accordingly.
  • Connect with the Lender – If you can’t pay your loan EMIs, immediately connect with your lender to figure out the next course of action.
  • Request for Brief Pause on EMI Payment – You can also request a waiver or pause on EMI payment in case of a sudden loss of income.

Additional Read – रु. 35,000 वेतन के लिए पर्सनल लोन

Conclusion 

Missing EMI payments can hurt your creditworthiness and attract penalties. This could result in higher interest rates in future or for the same loan for the remaining tenure. Therefore, always try to pay off your EMIs on time.

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