Sometimes you may miss an EMI payment. This is not a big deal, and fintech companies do not levy any charges. The best one offers a 5-day interest-free grace period. They might also give you a small reminder to ease the process. It helps save the penalty or an impact on the credit report.
But what if you fail to pay the instant personal loan EMI after this time gap? The lender usually starts to claim the money after 120 days. This is when impeccable credit history or genuine excuses need to be revised. There are no severe repercussions like higher interest or loan cancellation. But here’s what you can do to rectify the issue and ensure minimal hassle. Read on.
Switch the Tenure
Extending the tenure means smaller EMIs. The overall interest is reduced too. For instance, if you are on a 2.5% interest for 90 days, it turns into 2.25% when the tenure is 540 days. Small installments make it easy to repay if you have financial constraints.
There are fewer chances of default, and you can arrange for the money on time. See if your social lending company allows you to adjust midway and opt for a longer personal loan term.
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Defer the Payment
This acts as a breather in the cash flow. EMIs are paid by a borrower on a specific date each calendar month. But you may request to pay in the following cycle.
This allows some extra time and reduces stress. Make sure you can bring both months’ EMIs without hiccups. Otherwise, continuing with the instant personal loan may be a little troublesome.
Pick Additional Income
A second earning can offer financial flexibility. You will have enough spare to clear the EMI and the penalty amount. A few quick ways to earn money are selling unwanted stuff, baking a few goods, online freelancing, or conducting a workshop.
Make the best of your education and talent to make cash within the shortest possible time. Download the loan app from the Android or iOS stores to track the loan status.
Negotiate the Plan
Talk to the lender to see if the overall loan expense can be lowered. For example, try to request a reduction in the processing fees and the late payment fee.
Make sure you have a high credit score and a good repayment history. This way, you will come across a credible borrower. It goes a long way to make the instant personal loan affordable.
Conclusion
EMI default is quite common. But what you do next makes all the difference. Try not to opt for a ‘loan settled’ status by part payment. It is viewed as unfavorable than a loan that is paid in full. So, putting these tips into action can be helpful.
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