Loan overdue refers to the loan amount that a customer fails to repay on time. In such cases, the lender might charge an overdue interest rate or late payment fee on the amount overdue. If you miss EMI payments on a regular basis, the Loan Overdue Amount can significantly increase due to various penalties and additional interest that the lender may impose on late payments.
Credit Score
A single missed payment has little impact on your credit report. However, if you haven’t paid your EMIs in the last three months, it will severely impact your credit score.
This may result in the rejection of future credit applications since lenders constantly review a person’s credit record to assess their repayment history before disbursing a loan or providing a credit card. As a result, it is always a good idea to pay your loan on time. You must select the loan amount based on your needs and repayment capacity.
Late Payment Penalty
Before taking out a loan, you should make sure that you have a well-defined repayment strategy. Failing to pay your EMIs on time can affect your credit score, and that’s a given. But that’s not all, you may have to pay a penalty fee to your lender for late payment.
Depending on the type of loan, this additional Penal Interest Rate may vary from one lender to the next. For personal loans, it’s usually 2% per month on the amount overdue.
Loss of security
If you have a Home Loan or any other secured loan, such as a Gold Loan, a Loan Against Property, or a Loan Against Securities (Shares, Mutual Funds, Bonds, and so on), the loan’s late amount might lead to the loss of your collateral. Let’s break this out a little more.
If the loan overdue amount has increased for the past three months, i.e., the borrower has not paid the EMIs for the previous 90 days, the loan could be categorised as a non-performing asset (NPA). In such cases, lenders typically send reminders and 60-day warnings about the Loan Overdue Amount.
If you do not pay the Loan Overdue Amount within the notification period, the lender has the right to liquidate the assets you pledged as collateral. However, lenders usually give a 30-day notice before the auction.
Settling a loan is very different from repaying a loan and should not be confused with each other. In case of a loan settlement, the lending institution closes an individual’s loan account and reports the account as “settled” to the credit bureaus. However, this settled account is not considered a normal closure of the account and reflects badly on the individual’s credit profile.
A settled account can bring down the credit score significantly, making it difficult for the individual to get loans approved for the next few years. That’s why settling the loan overdue amount may not be the ideal solution. However, you could get help in the form of a cash loan. Scroll down to know how a personal loan could be helpful in repaying the loan overdue.
It is how a personal loan can assist you in paying off past-due bills:
Many people take cash loan in order to clear their loan overdue. If one wishes to do that, he/she needs to fulfil the following criteria first to avail of a personal loan:
Note that these requirements may vary across different financial institutions.
Delay in paying the overdue sum increases the amount of interest that must be paid, resulting in a mountain of debt. Delaying payments lower your credit score and increase your chances of having your loan denied in the future.
Integrate healthy financial habits into your lifestyle so that you can pay your dues on time. Always ensure that you have a separate fund set aside for your EMI obligations. In case you’re looking for a personal loan to clear your dues, you can download the Navi app. The loan application process is simple and 100% paperless, and you can get loans up to Rs.20 lakh at competitive rates starting at 9.9% p.a. Within minutes.
Ans: If you’re thinking about repaying debt, your savings account is the first place you’d look. You can use your savings to foreclose on the debt, but you’ll need a significant amount of money to do so. Keeping your focus on a loan with the highest interest rate is a fantastic method to start paying off your obligations.
Ans: While you may utilise one loan to pay off another, be sure to read the tiny print of your loan terms and conditions carefully. Also, most importantly, gauge your repayment capacity before taking another loan.
Ans: Prepaying your current personal loan in full or foreclosing it can reduce the debt burden off your shoulder. However, it’s your call entirely, whether you want to prepay your loan. Lenders like Navi don’t charge any fee for personal loan pre-closure.
Ans: You need to use a personal loan eligibility calculator to gauge the amount of personal loan you can get approved. Note that the personal loan amount that you can get also depends upon the lending institution.
Looking for instant 🚀 personal loans 24*7 anywhere, anytime? Get personal loans up to ₹20 lakh starting at 9.9% p.a. Install the Navi app now!
Disclaimer: This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
How to Get a Personal Loan without Income Proof?
When in sudden need for credit, both salaried and self-employed professionals can apply for a perso... Read More »How to Get Urgent Cash Loan without Documents Online in India?
An urgent cash loan without documents is a quick and easy solution for individuals in need of sudde... Read More »What is an Aadhaar Card Loan and How to Apply?
What is an Aadhaar Card? An aadhaar card loan is a type of instant cash loan that requires the b... Read More »20 Best Personal Loan Apps in India for Instant Loan in Feb 2023
Personal loan apps are apps designed for anyone looking for an instant personal loan with minimal d... Read More »Get Instant Cash Loan in 1 Hour Without Documents: Interest Rate and Eligibility
Instant Cash Loan in 1 Hour Are you in any emergency cash crisis and in need of an instant cash ... Read More »How to Apply for ₹5,000 Loan on Aadhaar Card?
Aadhaar card is an essential identity proof for all Indian citizens. From opening a new bank accoun... Read More »How to Get ₹20,000 Loan on Aadhaar Card?
Short on cash? What if we told you it's possible to get an instant, convenient, paperless ₹20,000... Read More »How to Get ₹10,000 Loan on Aadhaar Card?
Need ₹10,000 cash urgently to pay your rent or bills? Don’t worry, you can take a ₹10,000 loa... Read More »How to Get ₹50,000 Loan on Aadhaar Card?
Financial emergencies come unannounced. In such a situation, taking an instant personal loan could ... Read More »Peer to Peer (P2P) Lending – Features, Working, Benefits and How to Apply?
Peer-to-peer lending is an alternative financing system that enables borrowers to get loans from ot... Read More »What is a Cash Credit Loan and How to Apply for it?
What is a Cash Credit Loan? A cash credit loan is a short-term loan given to businesses to meet ... Read More »How to Get Small Cash Loan on Aadhaar Card without PAN Card?
Small cash loans are loans offered by banks and NBFCs to meet short-term financial requirements. Th... Read More »Top 10 Chit Fund Schemes in India in 2023
Chit funds are one of the most popular return-generating saving schemes in India. It is a financial... Read More »10 Best Gold ETFs to Invest in India in February 2023
Gold ETFs or Gold Exchange Traded Funds are passively managed funds that track the price of physica... Read More »Top 10 Demat Accounts in India [Lowest Brokerage Charges]
A Demat account was created to eliminate the time-consuming and inconvenient procedure of purchasin... Read More »20 Best Index Funds in India to Invest in 2023 (Updated on 31st Jan)
What is an Index Fund? An index fund is a type of mutual fund or exchange-traded fund (ETF) that... Read More »Best Arbitrage Mutual Funds to Invest in India: Returns and Taxation
Arbitrage funds are hybrid mutual fund schemes that aim to make low-risk profits by buying and sell... Read More »Best SIP Mutual Funds To Invest In India (2023) – Its Types And Taxation
A Systematic Investment Plan (SIP) is a convenient way to invest a fixed sum in mutual funds. For i... Read More »10 Best Corporate Bond Funds in India 2023 – With Returns
Corporate bond funds are debt funds that invest at least 80% of the investment corpus in companies ... Read More »10 Best Banks for Savings Account in India (2023)
A savings account keeps your money safe, and lets you earn interest every quarter. There are many b... Read More »All information is subject to specific conditions | © 2023 Navi Technologies Ltd. All rights are reserved.
FEE FREE MONTH
No Processing Fee on Cash Loan