The effects of defaulting on home loan EMI | Fusion - WeRIndia

Many people take home loans to realize their dreams. However, it is the one of the most impactful loans on the CIBIL credit score. Failing to pay EMIs on the home loan can be quite affecting on your financial life. Read on to know what kind of effects defaulting home loan EMI can have.

It impacts your CIBIL score

Home loans have strong impact on CIBIL score. Having few defaults in a short period of time can damage your credit rating. If your credit rating is damaged in CIBIL, then it becomes hard for you to secure loans in the future.

Penalties

Having defaults can cause a lot of interest (as much as 24 percent per annum). The longer you delay, the higher your payments will go. If you are stuck in a position where you cannot pay the EMI, it is best to approach the banker and explain your situation in order to work out some solution.

Getting other loans becomes hard

As stated above, if your credit score is bad, getting future loans and credit cards can be quite difficult when you need. Repairing a damaged credit score is not an easy task. You will have to make regular payments for several years to repair the score.

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