Understanding the Consequences of Home Loan EMI Bounces

What Does it Mean When Your Home Loan EMI Bounces?

 If you have ongoing Home Loan EMIs and miss a payment, perhaps because of insufficient funds or other payment issues, it is categorised as a ‘bounce’. Having an EMI bouncing never has a positive impact and often even result in a penalty, also known as Bounce Charges. 

It is crucial that both prospective borrowers and existing borrowers make a note of the impact that bounced EMIs can have on their finances and creditworthiness, so they can safeguard against it ever happening. 

 What are Some Causes Behind Your Home Loan EMIs Bouncing? 

Let’s first identify the reasons that can cause your next Home Loan EMI to bounce, so you can stay mindful and avoid the following scenarios:  

1. Insufficient funds: A lack of adequate funds in the account linked to the auto-mated EMI payments can lead to your payment bouncing  
2. Change in Banking Account Details: Another reason for your EMI payment not going through could be the failure to update new bank details with the Home Loan lender  
3. Payment Gateway Issues: May not be as common, but sometimes, technical glitches can also lead to your Home Loan EMI bouncing  

Ensure that you’re able to align the funds in your account to match your repayment schedule, and initiate all required automations so your payments can continue without unseen interruptions.

 What are the Consequences of Home Loan EMIs Bouncing? 

Borrowers should never take EMI payments lightly. Following are the consequences of one’s Home Loan EMIs bouncing:  

1. Substantial penalties: If your Home Loan EMIs bounce, you are like to incur additional charges and penalties for each missed payment. These charges are subject to the lenders’ discretion and will be communicated to you, at the time of loan disbursal itself.  
2. Credit score impact: If your Home Loan EMIs bounce, it will reflect poorly on your repayment history and have a direct negative impact on your credit score – and the chances of securing competitive loans in the future.  
3. Possibility of losing your property: Continuous defaults may even lead to the lender taking strict legal action against you, and lead to your property being seized.  

 What to Do if Your Home Loan EMI Bounces 

Here are some immediate measures borrowers can consider if their Home Loan EMI bounces, to avoid strict repercussions:  

1. Intimate your lender immediate: If your Home Loan EMI bounces, contact your lender immediately to inform them, and to work out a plan of payment.  
2. Review bank balance and align payment dates: Ensure there are sufficient funds in your account to cover the EMI and address any balance shortages promptly. It is also a good idea to coordinate salary dates with EMI deduction dates to avoid any possibility of a fund crunch in your bank account.  
3. Set up reminders: Set up reminders to alert you about upcoming EMIs which can help you prevent missing payments due to simple oversight.  

To avoid the possibility of default on your EMIs or incurring EMI Bounce charges, consider:  

• Maintaining sufficient balance in your EMI-linked account  

• Setting up auto-debit for hassle-free debits  

• Monitoring payment due dates and tracking EMIs