Missed loan EMI in India can lead to late payment charges, bounce fees, credit score damage, and in serious cases, legal recovery action. While one delayed payment may not seem serious, ignoring a missed loan EMI in India can create long-term financial consequences.
In this 2026 guide, we explain what happens after an EMI is missed, how much penalty banks charge, how it affects your CIBIL score, and what steps you should take to protect your credit profile.
What Happens After a Missed Loan EMI in India?
If your EMI auto-debit fails due to insufficient balance, the lender (bank or NBFC) typically:
- Marks the transaction as failed
- Applies an EMI bounce charge
- Adds late payment interest
- Sends SMS/email reminders
- Reports overdue status in the next billing cycle
Most lenders report repayment behavior to credit bureaus such as:
- TransUnion CIBIL
- Experian India
- Equifax India
If the payment remains unpaid beyond the billing cycle, it may be reported as DPD (Days Past Due).
EMI Bounce Charges in India (2026)
When your EMI auto-debit fails due to insufficient funds, lenders apply a bounce charge.
Typical bounce charges:
₹300 – ₹750 + 18% GST
(Varies by lender and loan type)
Example
EMI Amount: ₹8,000
Bounce Charge: ₹500
GST (18%): ₹90
Total payable next cycle: ₹8,590
Repeated bounce events increase overall cost and may negatively impact your repayment record.
Late Payment Penalty (Overdue Interest)
Late payment penalties are separate from bounce charges.
If EMI is paid after the due date, lenders may charge:
2% – 4% per month on overdue amount
(Some lenders calculate daily)
Example
Overdue EMI: ₹10,000
Delay: 10 days
Additional penalty may range between ₹300 – ₹600 depending on policy.
Always check your loan agreement for exact penalty structure.
What Happens After 30, 60 or 90 Days of Non-Payment?
Banks report repayment behavior using DPD codes:
| Days Late | CIBIL Status | Meaning |
|---|---|---|
| 0 Days | 000 | No delay |
| 30 Days | 030 | 1 EMI overdue |
| 60 Days | 060 | 2 EMIs overdue |
| 90 Days | 090 | Serious default |
30 Days Delay
- Visible impact on credit report
- Possible drop in credit score
60 Days Delay
- Larger score reduction
- Aggressive follow-up from lender
90 Days Delay
- Account may be classified as NPA (Non-Performing Asset)
- Strong negative credit impact
- Recovery action may begin
How a Missed Loan EMI in India Affects Your CIBIL Score
CIBIL score range: 300 – 900
Good score in India: 750+
One missed EMI can reduce your score by approximately 50–100 points, especially if:
- You have short credit history
- You have high credit utilization
- You have previous delays
Repeated missed payments can push your score below 650, making future loans expensive or difficult to obtain.
Negative entries can remain on your credit report for up to 7 years.
If your score has already dropped due to a missed loan EMI in India, you can follow our step-by-step guide on how to increase CIBIL score fast to understand practical strategies for rebuilding your credit profile.
Legal Consequences of Missing EMI
Legal action depends on loan type and default duration.
Personal Loans & Credit Cards
- Recovery calls begin
- Legal notice may be issued after prolonged default
- Settlement offers possible (but impacts credit score)
Home Loans (Secured Loans)
If default exceeds 90 days, lenders may initiate recovery under the SARFAESI Act.
This may include:
- Legal notice
- Asset seizure process
- Property auction (in extreme cases)
Vehicle Loans
Extended default may lead to repossession following due legal process.
Ignoring EMI for long periods increases legal risk.
RBI Rules on Recovery Practices
As per guidelines issued by the Reserve Bank of India (RBI):
- Recovery agents cannot use abusive language
- Public humiliation or harassment is prohibited
- Calls should not be made outside reasonable hours (generally 8 AM to 7 PM)
- Charges must be clearly mentioned in the loan agreement
Borrowers can escalate complaints through:
- Bank grievance redressal officer
- RBI Integrated Ombudsman Scheme
- RBI Complaint Management System (CMS portal)
Official references:
Always verify updates directly on the official RBI website.
Can You Remove a Missed EMI From CIBIL?
If the delay was genuine and reported correctly, removal is difficult.
However, you can:
- Clear all outstanding dues
- Maintain 6–12 months clean repayment history
- Raise dispute if reporting error exists
- Request lender correction after full settlement
Consistent repayment behavior helps rebuild score over time.
What If You Cannot Pay EMI?
If facing financial hardship, consider:
- Loan restructuring
- Temporary moratorium (if available)
- Balance transfer to lower interest loan
- Discussion with lender
Settlement is a last option.
Important:
Settlement status reflects as “Settled” in credit report and may affect future loan approvals.
EMI Bounce vs EMI Default (Key Difference)
| EMI Bounce | EMI Default |
|---|---|
| Payment failed due to insufficient balance | EMI unpaid for 30+ days |
| Bounce charge applied | Credit bureau impact confirmed |
| Can be corrected quickly | Serious credit damage |
| Short-term issue | Long-term consequence |
Bounce is technical.
Default is credit damage.
Frequently Asked Questions
What happens if EMI is missed by 1 day?
Usually no big issue. But some banks still charge penalty. Better pay immediately.
How much are EMI bounce charges in India?
Normally ₹300–₹750 + GST per bounce.
Does 1 missed EMI affect CIBIL?
Yes, if reported as 30 DPD. Score drop ho sakta hai 50+ points.
Can bank file case for EMI missed?
Yes, after continuous default. Especially home loan & secured loans.
How many EMI missed before legal action?
Usually after 90 days default serious action start hota hai.
How to Avoid Missing EMI in Future
- Maintain emergency fund (3–6 months EMI amount)
- Set EMI date after salary credit
- Keep balance buffer before due date
- Use calendar reminders
- Avoid over-borrowing
Financial discipline protects your credit profile.
Final Words 2026 Advice
A missed loan EMI is not the end of your financial life. But ignoring it can damage your credit profile, increase costs, and create unnecessary stress.
If a payment is missed:
- Clear dues immediately
- Contact your lender
- Confirm payment update
- Monitor your credit report
Your repayment history directly impacts your future borrowing ability.
Understanding how a missed loan EMI in India affects your credit report can help you take corrective action before long-term financial damage occurs.
This article is written based on RBI guidelines, Indian banking norms, and credit bureau reporting standards applicable in 2026. For case-specific advice, consult your bank or a certified financial advisor.
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