3 min
05-May-2025
Managing healthcare expenses can be a daunting task, especially when it comes to purchasing costly medical equipment like ventilators, wheelchairs, oxygen concentrators, or diagnostic machines. To ease this financial burden, many healthcare providers and financing companies now offer Medical Equipment Loan EMI payment options. These allow individuals, hospitals, and clinics to acquire essential medical devices without paying the full amount upfront. Instead, borrowers can spread the cost over manageable Equated Monthly Instalments (EMIs), often with flexible tenures ranging from 6 to 60 months. Some lenders also offer zero-cost EMI, low interest rates, minimal documentation, and quick approvals, making it a convenient and accessible solution. Whether you're a caregiver at home or a healthcare business looking to upgrade your infrastructure, a medical equipment loan can ensure uninterrupted care without straining your finances. With EMI options, getting life-saving technology is no longer a financial hurdle but a practical, stress-free process.
One of the immediate consequences of missing an EMI is the imposition of late payment penalties. Most lenders charge a fixed percentage or a flat fee on overdue amounts, increasing the total repayment burden. Over time, repeated delays can snowball into a significant financial strain.
Another critical impact is on your credit score. Every missed or delayed EMI is reported to credit bureaus, which can negatively affect your credit history. A lower credit score can reduce your chances of securing future loans or credit cards and may result in higher interest rates if you do qualify for financing.
For businesses such as hospitals or diagnostic centres, missed payments can lead to equipment repossession. In secured loans, the lender has the right to reclaim the medical equipment in case of default, disrupting essential healthcare services and damaging the reputation of your institution.
In some cases, continuous default may trigger legal actions. While lenders usually prefer to resolve matters amicably, long-term non-payment can result in court proceedings, increasing both financial and emotional stress for the borrower.
Furthermore, missing EMIs can also affect morale and operational efficiency, especially in a healthcare setting where delays in medical equipment availability can have life-threatening consequences. Patients may experience service disruptions, leading to a loss of trust and potential business losses.
To avoid these consequences, it is advisable to plan your finances before taking a loan. If you anticipate difficulty in making payments, communicate with your lender in advance. Many institutions offer EMI restructuring, deferment options, or short-term relief measures to help borrowers during financial hardships.
Negative reporting to credit bureaus
Every missed EMI is reported by the lender to credit bureaus such as CIBIL, Experian, or Equifax. This negative entry lowers your credit score and reflects poor repayment behaviour.
Reduction in credit score
A single missed EMI can reduce your credit score by 50 to 100 points, depending on your existing credit profile and payment history. Frequent defaults can bring it down even further.
Impact on credit history duration
Defaults stay on your credit report for several years, often up to 7 years. This long-term stain can affect your ability to secure loans or credit in the future.
Decreased loan eligibility
A lower credit score reduces your eligibility for future loans, including personal loans, home loans, and even business funding. Lenders see defaulters as high-risk borrowers.
Higher interest rates in future loans
If you do get approved for a loan with a low credit score, you may have to pay higher interest rates, increased processing fees, or provide more collateral due to the perceived risk.
Rejection of credit card applications
EMI defaults can lead to rejection of new credit card applications or reduced limits on your existing cards, limiting your financial flexibility.
Difficulty in availing emergency credit
During emergencies, having a good credit score helps in obtaining quick loans. A low score due to defaults might result in delays or complete denial of much-needed funds.
Co-borrower and guarantor impact
If your medical equipment loan has a co-applicant or guarantor, their credit scores may also be impacted, straining personal or business relationships.
Additional documentation for new loans
Borrowers with a history of EMI defaults may be asked to provide more documentation, proof of income, or justification for past defaults, making loan approvals more complicated.
Need for a longer credit rebuilding period
Once your score drops, rebuilding credit takes time—consistent on-time payments, lower credit utilisation, and financial discipline over months or even years are required.
Late payment charges
Most lenders charge a fixed percentage (commonly 2% to 3%) of the overdue EMI amount as a penalty. This fee is added to your next billing cycle and increases your repayment burden.
Interest on overdue amount
Apart from late fees, penal interest may be levied on the overdue amount. This can range from 18% to 36% per annum, depending on the lender’s policy and the duration of the delay.
Bounce charges
If the EMI payment is missed due to insufficient funds in your bank account, lenders may charge cheque bounce fees or ECS return charges, usually between ₹250 to ₹750 per instance.
GST on penalties
All late fees and charges attract Goods and Services Tax (GST), which further increases the total amount you owe.
Cumulative charges for multiple misses
Repeated EMI defaults lead to compounded late fees and penal interest, drastically raising the total loan liability over time.
Rescheduling fees
If you request a change in the EMI schedule due to financial difficulty, lenders may charge a loan restructuring or rescheduling fee, typically ₹500 to ₹2,000, depending on the loan size and institution.
Legal charges (if applicable)
In case of prolonged default, lenders may initiate legal action, and you could be liable for legal and administrative expenses, which are recoverable under the loan agreement.
Collection charges
When loan recovery agents are assigned, you may be required to pay collection fees or agent visit charges, which further escalate the financial burden.
Processing fees on re-loaning
If you plan to refinance or take another loan to repay the defaulted one, you’ll likely incur new processing fees, generally ranging from 1% to 2% of the loan amount.
Loss of grace period benefits
Some lenders offer grace periods for genuine delays. However, repeated defaults may result in the cancellation of future grace benefits, making future EMI delays more costly.
Issuance of a loan default notice
Lenders typically begin the legal process by sending a formal default notice after a specific number of missed EMIs, usually 2 or 3. This notice outlines the overdue amount, late fees, and a deadline for payment.
Final demand notice
If the borrower fails to respond or clear dues, a final demand notice is issued. This serves as the lender’s last attempt to settle the matter amicably before initiating repossession.
Initiation of repossession under loan agreement
The loan agreement includes a repossession clause, which legally allows the lender to reclaim the medical equipment in case of default. This action is typically taken without the need for court intervention if terms are clearly defined.
Appointment of recovery agents
Lenders may appoint authorised recovery agents to visit the borrower’s premises and take possession of the equipment. The process must comply with guidelines laid out by the Reserve Bank of India (RBI) and other regulatory authorities.
Filing of legal suit (if necessary)
If the borrower obstructs repossession or the equipment cannot be recovered easily, the lender may file a civil suit in court to obtain legal approval for seizure.
Court-ordered repossession
In more serious or contested cases, the court may issue a repossession order, authorising the lender to retrieve the equipment with police assistance, if required.
Auction of repossessed equipment
Once repossessed, the lender may sell the equipment through public auction to recover outstanding dues. Any shortfall after the sale may still be claimed from the borrower.
Legal liability for the remaining balance
If the auction does not cover the full outstanding amount, the borrower is still legally liable to pay the balance, and further legal action may be initiated for recovery.
Negative impact on credit record
Legal repossession is reported to credit bureaus and significantly damages the borrower's credit score and future borrowing ability.
Create a dedicated EMI budget
Allocate a specific portion of your income exclusively for EMI payments. Factor this into your monthly expenses to ensure funds are always available before the due date.
Set up auto-debit or standing instructions
Enable auto-debit from your bank account to avoid missing EMIs due to forgetfulness. Just ensure your account has a sufficient balance on the EMI date.
Use digital platforms for easy payments Make use of digital tools like the Bajaj EMI overdue payment online option to pay missed or pending EMIs quickly and securely.
Make advance EMI payments If you have surplus funds, consider paying ahead using the Bajaj Finserv EMI advance payment feature. This can reduce your financial stress and improve your loan profile.
Track loan statements regularly
Regularly review your loan statement to check for any errors or pending dues. Timely monitoring helps you stay informed and plan ahead.
Maintain a contingency fund
Keep at least 2–3 months’ worth of EMI payments in a separate savings account. This fund acts as a buffer in case of unexpected financial emergencies.
Opt for EMI holiday or moratorium (if available)
In times of temporary financial hardship, check with your lender if they offer EMI holidays or grace periods. This can give you breathing space without defaulting.
Inform lenders about financial struggles
If you foresee a payment issue, communicate with your lender in advance. They may offer solutions like EMI restructuring, due date adjustments, or temporary deferments.
Avoid over-borrowing
Don’t take on loan amounts larger than what you can comfortably repay. Assess your income and fixed obligations before applying.
Choose a longer tenure if needed
Longer loan tenure means lower EMIs. While you may pay more in total interest, it’s safer if you’re uncertain about monthly cash flows.
Consequences of missing medical equipment loan EMI payments
Taking a medical equipment loan can be a great way to ease the financial pressure of acquiring costly healthcare devices. However, it is crucial to maintain discipline in repaying the EMIs (Equated Monthly Instalments) on time. Missing these payments can lead to several financial and legal consequences, which could affect both your creditworthiness and access to essential healthcare equipment.One of the immediate consequences of missing an EMI is the imposition of late payment penalties. Most lenders charge a fixed percentage or a flat fee on overdue amounts, increasing the total repayment burden. Over time, repeated delays can snowball into a significant financial strain.
Another critical impact is on your credit score. Every missed or delayed EMI is reported to credit bureaus, which can negatively affect your credit history. A lower credit score can reduce your chances of securing future loans or credit cards and may result in higher interest rates if you do qualify for financing.
For businesses such as hospitals or diagnostic centres, missed payments can lead to equipment repossession. In secured loans, the lender has the right to reclaim the medical equipment in case of default, disrupting essential healthcare services and damaging the reputation of your institution.
In some cases, continuous default may trigger legal actions. While lenders usually prefer to resolve matters amicably, long-term non-payment can result in court proceedings, increasing both financial and emotional stress for the borrower.
Furthermore, missing EMIs can also affect morale and operational efficiency, especially in a healthcare setting where delays in medical equipment availability can have life-threatening consequences. Patients may experience service disruptions, leading to a loss of trust and potential business losses.
To avoid these consequences, it is advisable to plan your finances before taking a loan. If you anticipate difficulty in making payments, communicate with your lender in advance. Many institutions offer EMI restructuring, deferment options, or short-term relief measures to help borrowers during financial hardships.
Impact on credit score due to EMI default
Defaulting on an EMI (Equated Monthly Instalment) payment, especially on a medical equipment loan, can significantly damage your credit profile. Below are key points that explain how and why EMI defaults affect your credit score and overall financial credibility:Negative reporting to credit bureaus
Every missed EMI is reported by the lender to credit bureaus such as CIBIL, Experian, or Equifax. This negative entry lowers your credit score and reflects poor repayment behaviour.
Reduction in credit score
A single missed EMI can reduce your credit score by 50 to 100 points, depending on your existing credit profile and payment history. Frequent defaults can bring it down even further.
Impact on credit history duration
Defaults stay on your credit report for several years, often up to 7 years. This long-term stain can affect your ability to secure loans or credit in the future.
Decreased loan eligibility
A lower credit score reduces your eligibility for future loans, including personal loans, home loans, and even business funding. Lenders see defaulters as high-risk borrowers.
Higher interest rates in future loans
If you do get approved for a loan with a low credit score, you may have to pay higher interest rates, increased processing fees, or provide more collateral due to the perceived risk.
Rejection of credit card applications
EMI defaults can lead to rejection of new credit card applications or reduced limits on your existing cards, limiting your financial flexibility.
Difficulty in availing emergency credit
During emergencies, having a good credit score helps in obtaining quick loans. A low score due to defaults might result in delays or complete denial of much-needed funds.
Co-borrower and guarantor impact
If your medical equipment loan has a co-applicant or guarantor, their credit scores may also be impacted, straining personal or business relationships.
Additional documentation for new loans
Borrowers with a history of EMI defaults may be asked to provide more documentation, proof of income, or justification for past defaults, making loan approvals more complicated.
Need for a longer credit rebuilding period
Once your score drops, rebuilding credit takes time—consistent on-time payments, lower credit utilisation, and financial discipline over months or even years are required.
Late fees and penalties for medical equipment loan missed payments
Missing an EMI on your medical equipment loan can result in additional financial burdens beyond just the overdue amount. Lenders often impose a range of charges to discourage defaults and recover losses. Here are the key points outlining the late fees and penalties typically associated with missed EMI payments:Late payment charges
Most lenders charge a fixed percentage (commonly 2% to 3%) of the overdue EMI amount as a penalty. This fee is added to your next billing cycle and increases your repayment burden.
Interest on overdue amount
Apart from late fees, penal interest may be levied on the overdue amount. This can range from 18% to 36% per annum, depending on the lender’s policy and the duration of the delay.
Bounce charges
If the EMI payment is missed due to insufficient funds in your bank account, lenders may charge cheque bounce fees or ECS return charges, usually between ₹250 to ₹750 per instance.
GST on penalties
All late fees and charges attract Goods and Services Tax (GST), which further increases the total amount you owe.
Cumulative charges for multiple misses
Repeated EMI defaults lead to compounded late fees and penal interest, drastically raising the total loan liability over time.
Rescheduling fees
If you request a change in the EMI schedule due to financial difficulty, lenders may charge a loan restructuring or rescheduling fee, typically ₹500 to ₹2,000, depending on the loan size and institution.
Legal charges (if applicable)
In case of prolonged default, lenders may initiate legal action, and you could be liable for legal and administrative expenses, which are recoverable under the loan agreement.
Collection charges
When loan recovery agents are assigned, you may be required to pay collection fees or agent visit charges, which further escalate the financial burden.
Processing fees on re-loaning
If you plan to refinance or take another loan to repay the defaulted one, you’ll likely incur new processing fees, generally ranging from 1% to 2% of the loan amount.
Loss of grace period benefits
Some lenders offer grace periods for genuine delays. However, repeated defaults may result in the cancellation of future grace benefits, making future EMI delays more costly.
Legal actions for repossession of your medical equipment loan
Defaulting on a medical equipment loan can have serious consequences, especially if the loan is secured by the equipment itself. In such cases, lenders have the legal right to repossess the equipment after repeated missed EMI payments. Below are key points explaining the legal actions that may be taken for repossession:Issuance of a loan default notice
Lenders typically begin the legal process by sending a formal default notice after a specific number of missed EMIs, usually 2 or 3. This notice outlines the overdue amount, late fees, and a deadline for payment.
Final demand notice
If the borrower fails to respond or clear dues, a final demand notice is issued. This serves as the lender’s last attempt to settle the matter amicably before initiating repossession.
Initiation of repossession under loan agreement
The loan agreement includes a repossession clause, which legally allows the lender to reclaim the medical equipment in case of default. This action is typically taken without the need for court intervention if terms are clearly defined.
Appointment of recovery agents
Lenders may appoint authorised recovery agents to visit the borrower’s premises and take possession of the equipment. The process must comply with guidelines laid out by the Reserve Bank of India (RBI) and other regulatory authorities.
Filing of legal suit (if necessary)
If the borrower obstructs repossession or the equipment cannot be recovered easily, the lender may file a civil suit in court to obtain legal approval for seizure.
Court-ordered repossession
In more serious or contested cases, the court may issue a repossession order, authorising the lender to retrieve the equipment with police assistance, if required.
Auction of repossessed equipment
Once repossessed, the lender may sell the equipment through public auction to recover outstanding dues. Any shortfall after the sale may still be claimed from the borrower.
Legal liability for the remaining balance
If the auction does not cover the full outstanding amount, the borrower is still legally liable to pay the balance, and further legal action may be initiated for recovery.
Negative impact on credit record
Legal repossession is reported to credit bureaus and significantly damages the borrower's credit score and future borrowing ability.
How to avoid defaulting on a medical equipment loan EMI?
Defaulting on a medical equipment loan EMI can lead to serious financial and legal consequences. Here are practical tips to help you stay on top of your repayments and protect your credit score:Create a dedicated EMI budget
Allocate a specific portion of your income exclusively for EMI payments. Factor this into your monthly expenses to ensure funds are always available before the due date.
Set up auto-debit or standing instructions
Enable auto-debit from your bank account to avoid missing EMIs due to forgetfulness. Just ensure your account has a sufficient balance on the EMI date.
Use digital platforms for easy payments Make use of digital tools like the Bajaj EMI overdue payment online option to pay missed or pending EMIs quickly and securely.
Make advance EMI payments If you have surplus funds, consider paying ahead using the Bajaj Finserv EMI advance payment feature. This can reduce your financial stress and improve your loan profile.
Track loan statements regularly
Regularly review your loan statement to check for any errors or pending dues. Timely monitoring helps you stay informed and plan ahead.
Maintain a contingency fund
Keep at least 2–3 months’ worth of EMI payments in a separate savings account. This fund acts as a buffer in case of unexpected financial emergencies.
Opt for EMI holiday or moratorium (if available)
In times of temporary financial hardship, check with your lender if they offer EMI holidays or grace periods. This can give you breathing space without defaulting.
Inform lenders about financial struggles
If you foresee a payment issue, communicate with your lender in advance. They may offer solutions like EMI restructuring, due date adjustments, or temporary deferments.
Avoid over-borrowing
Don’t take on loan amounts larger than what you can comfortably repay. Assess your income and fixed obligations before applying.
Choose a longer tenure if needed
Longer loan tenure means lower EMIs. While you may pay more in total interest, it’s safer if you’re uncertain about monthly cash flows.
