Loan: Taking a loan can be a necessity at times, but paying the EMI on time can become a challenge. When you miss EMI payments, the most immediate consequence is the impact on your CIBIL score. A lower CIBIL score can make it difficult to get loans in the future. Constant EMI bounce signals trouble for the borrower.
If you are also struggling to pay your EMIs, here are 4 simple things you can do to avoid a decline in your CIBIL score and easily manage your loan repayment.
1. Talk to Your Bank Manager
If you are facing issues in paying your EMI, the first step is to talk to your bank manager. Let them know the reason why you are unable to make the payments. You can explain that it’s not intentional but due to unavoidable circumstances.
If the bank manager understands your situation, they might offer some relief. You can assure them that you will make the payments on time in the future, and they may also waive off penalties. This could help you avoid further trouble and keep your credit report intact.
2. Request to Prevent Negative Reporting to CIBIL
If you miss one or two EMIs, they are usually not reported to CIBIL because banks typically send the report only after the third EMI bounce. So, before your third EMI bounces, go to the bank, explain the situation, and assure them that you will make the payment on time. Request the bank to not send a negative report to CIBIL. If your CIBIL score drops, it becomes harder to get loans in the future, so it’s essential to make this request to the bank.
3. EMI Hold Option
If you feel that you are unable to pay the EMI for some time due to financial constraints, and you will be able to make the payment once you manage your finances, you can request the bank for an EMI hold. Some banks allow you to hold the EMI payments for a while until your situation improves.
Once you have arranged the necessary funds, you can pay the EMIs and resume normal payments. This will give you time to manage your finances without the stress of missing payments.
4. Choose the Arrears EMI Option
Many people get their salary at the end of the month, but EMI is usually deducted at the beginning of the month. This mismatch can make it difficult to pay your EMI on time. In such a case, you can talk to the bank and request an arrears EMI option.
The arrears EMI option means you can change the EMI date to match your salary date. For example, if your salary is received towards the end of the month, you can request the bank to adjust your EMI date accordingly. You will need to discuss this option with the bank manager, and they will help you work it out.
Conclusion
If you are struggling with EMI bounce issues, don’t panic. By taking steps like communicating with your bank manager, requesting to prevent negative CIBIL reporting, holding EMI payments, and opting for arrears EMI, you can protect your CIBIL score and manage your loan repayments effectively.
The key is to take action early. This will not only relieve you in the short term but also ensure that you don’t face any future issues while applying for loans.
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