How Can Non-Payment Of EMIs Post Moratorium Impact Your Life?

Rahul helped Vaishali in understanding the impact of not paying EMIs after the end of the moratorium on his home loan. After speaking with Rahul, she realized that delay in EMI payment will not only impact his credit score but will also affect his future borrowings. 


Taking Rahul's advice, Vaishali ensured that she pays her due EMIs in time, avoiding any possible default charges.


Rahul helped Vaishali reduce the burden of her home loan, as he made her understand that paying EMIs in time is for her own benefit. Read why.


A loan helps you purchase things that you wouldn't afford with your hard-earned money. In exchange for the credit you avail, you pay equated monthly installments or EMIs. However, at times there are some circumstances due to which you may fail to pay EMIs on the said date.
With the recent pandemic crisis, this situation has become even more prominent. To offer relief to the loan borrowers in such harsh times, the Reserve Bank of India notified Financial Institutions to introduce a moratorium on secured and unsecured loans. The regulator allowed the banks, NBFCs & FIs to postpone the presentation of EMIs from March-May, which was later extended until 31st August 2020. Also, the RBI issued a clear mandate that the loan's non-payment during the moratorium period will not affect your credit score. If you opted for a moratorium, your lender would have allowed you to delay payment of the EMI of your loan for the given period without levying any penalty. Now, when this Moratorium period is over, let us get to know how the non-payment of EMIs after the end of the moratorium can impact your life;


Piling up future EMIs


Some people have chosen the moratorium on their loans. While deferring payments may provide some relief to you temporarily, it will eventually pile up to the future costs. Hence, the postponement of EMIs any further (after the end of the moratorium on loan) should be avoided. Customers should rather try and make pre-payment on their loan on which Moratorium was availed to balance the impact of deferred EMI and increased tenor.


Hefty interest payments & CIBIL reporting


Now since the Moratorium period is over,  you should not skip the payment of EMI  as the accumulating interest & default charges will further lead to increased debt burden and will also result in drop in your credit score. 
The Financial Institutions will now report your loan repayment details to the credit information companies as before and non-repayment of EMI or delay in EMI payment will adversely impact your credit score and hence lead to poor credit history. 
These are the impacts you could face if you postpone or defer payment of EMIs after the end of moratorium on your loan.