What are the consequences of missing a Home Loan EMI?
What are the consequences of missing a Home Loan EMI
Published: Feb 22, 2023
Owning a home is one of the major milestones in one’s life. A house is not just a roof over your head but also an important investment that can help you in the future. But with property prices constantly going up, buying a house is no less than a challenge. In such a situation, availing a home loan comes across as a convenient option. In India, a home loan is one of the best ways to arrange sufficient funds for the purchase of your dream home. This is a financing option that allows you to spread the cost of the property over a period of time. You can choose a loan tenure that suits your needs and budget and make the repayment in monthly instalments. However, when you take the EMI route, it is important that you make the EMI payment on time.
Now one question that comes to almost everyone’s mind is: what happens when you miss a home loan EMI? Here is the answer to this. Failing to make the monthly payment of your home loan on time can actually have some serious consequences. Having to pay a late payment fee and a slight increase in the total payable interest are the ones most people know about. The penalty charge is usually around 1–2% of the overdue amount. But other than these, there are a few more consequences of missing a home loan EMI. These are:
Negative Impact on Your Credit Score
A credit score is a rating that is used by financial entities to assess the creditworthiness of a borrower when lending money. In other words, this score reflects the financial stability and credit history of an individual. When you miss an EMI on a home loan, it has a detrimental impact on your credit score, which may decline by 50 to 70 points.
Lesser Chances of a Home Loan Balance Transfer

If you skip 2 or 3 EMI payments against your ongoing home loan, it affects your eligibility to apply for a home loan balance transfer. This means you will not have the opportunity to get your existing home loan refinanced at a reduced interest rate.

Being Labeled as an NPA
If you miss your home loan EMI and fail to settle the dues within 90 days of your last payment, the lender may put your loan under the category of NPAs, or non-performing assets. It may also result in you receiving legal notice from the lending institution.
Eligibility Issues for Future Loans

This is a fact that effective credit management can help you improve your credit score over time. But when you skip a home loan EMI, the lending institution leaves a remark on your credit report. These remarks can affect your chances of getting a loan in the future in a negative way.

To avoid any of the aforementioned consequences, it is important to ensure that you always make the EMI payment on time. For this, you can opt for a longer tenure while availing the home loan. It reduces the EMI amount, which also results in fewer chances of you missing a payment.

Capri Loans is one of the leading NBFCs in India that offers easy and quick home loans. We offer a wide range of schemes at the most competitive interest rates with different loan tenure options. You can choose any of the home loan options offered by Capri and use the home loan EMI calculator to find a suitable option for you.