What Could Happen If You Fail To Repay Your Personal Loan

    Everyone who obtains a personal loan is aware that it must be repaid in full with a fixed EMI. But regrettably, people encounter difficult financial circumstances that compel them to default on their loan obligations. A medical emergency, job loss, an urgent trip, etc., are a few situations that result in late EMI payments. It is preferable to let the lender of your fast personal loan know when you are in this circumstance and unable to make payments. Most lenders will provide assistance and guidance with suitable choices to get your loan payment back on track.

    However, if the lender has set repayment terms and does not provide the essential assistance, you can experience the consequences listed below.

    Things that you might have to face depending on your lender.

    EMIs are a more suitable loan repayment alternative than lump-sum payments. However, your obligations increase if you fail to make an EMI payment, even if you borrowed from a quick loan app. You might be required to pay the full amount and any late payment fees within the tenure’s remaining days. Your financial burden will consequently grow.

    • Banks or other loan institutes like easy loan app notify credit bureaus of EMI defaults. If you have passed the overdue payments before a predetermined number of days, there won’t be a problem. Otherwise, the lender will inform the credit reporting agencies that your credit rating has been written off. Since it could make the credit report appear negative, it will be difficult for you to obtain new loans.
    • The lender may use the co-signer or guarantor to collect any missed payments on the personal loan. To collect their personal loan amount directly, the lender may phone them as a reminder.
    • Your credit score is somewhat impacted because lenders record late loan payments to Indian credit bureaus like CIBIL and Equifax. A low credit score may make it more difficult for you to obtain a same day loan or other future loans or credit.
    • Lenders may file a lawsuit if you don’t make your EMI payments for over 180 days. The lender can file against you to recoup their investment. If you admit you are a wilful defaulter, the lender may also bring criminal proceedings against you. After the Insolvency and Bankruptcy Code was passed in 2016, lenders could file lawsuits against borrowers who defaulted on their loans. It was clear that even borrowers were better protected against legal action. The RBI increased rules, which also made it harder to obtain personal loans.
    • On late or missed payments for personal loans, the lender may impose a penalty or additional fees. When you miss an EMI payment, penalties that may total 2% or more of the missed payment are assessed.
    • If you don’t pay your EMIs on time or default on your loan, the lender, like Kopa pesa loan app, may charge you a high interest rate since they may view you as a financial risk.
    • Although a personal loan is insecure, the lender may request collateral in some circumstances, such as when you cannot repay the loan or have consistently missed EMI payments.


    If you are having trouble paying back the loan, let the lender know immediately because they might be able to provide solutions like restructuring or forbearance. In the end, paying your debts on time and keeping lines of communication open are crucial to avoiding the bad effects of defaulting on a personal loan.