Home Loan EMI: Food, clothes and house, these three things are the basic needs of the people. Everyone dreams of owning their own house, to fulfill which almost all banks and many housing finance companies provide home loans. Home loan also fulfills the need of house and you also repay it in easy installments.

However, sometimes there are many difficulties in paying the EMI on time because the EMI amount is not a small amount. It has to be deposited on a fixed date of every month. Suppose such a situation arises that you have Rs 20,000 in your account and your installment on home loan is Rs 25,000, then obviously your EMI is bound to bounce. Now the question comes that if the EMI bounces, does the bank impose a penalty and does it affect your CIBIL score. Let us know:-

Will the bank impose penalty?

If your EMI on home loan bounces, you will have to pay a penalty to the bank. If the bank balance is not sufficient, auto debit will fail. On this the bank will deduct bounce charge between Rs 250-500. Apart from this, loan penalty will also be imposed.

Under this, whichever bank or institution you have taken the loan from, will charge an additional penalty of Rs 500-1000 or penal interest at the rate of 1-2% per month on the outstanding EMI.

If your first EMI has bounced and you have not done so intentionally, then you will have to go to your bank branch without thinking anything. Meet the manager there and share your views with him and assure him that this will not happen in future. If they find what you have said reasonable, then it is possible that there may be some reduction in the penalty imposed by the bank.

If your installment has bounced one after the other, then first pay your installment and then request the bank manager not to send a negative report to the civil. If installments are bounced for three consecutive months, your CIBIL score may get disturbed. If the CIBIL score gets spoiled, there may be difficulty in getting the loan again.

Effect on CIBIL score

In case of bounced EMI, it is immediately reported to the credit bureau. This will reduce your CIBIL score, which may pose a challenge in getting a new loan in future. Moreover, due to CIBIL tampering, you may also face problems in getting a credit card.

What if I can pay EMI only for a long time?

If you are not able to arrange money for a long time, then you can talk to your bank and ask for a grace period of some time. You can also apply to put the installment on hold for some time by telling the bank about your compulsion.

If you are facing problems in paying the installment every time due to late salary, then you can talk to your bank manager for arrear EMI, in which the EMI amount has to be paid at the end of the month. Whereas usually people are given the option of advance EMI. In this, the installment amount has to be paid at the beginning of the month.

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