The financial landscape has evolved with the introduction of the new 7-day CIBIL reporting rule. Under this regulation, any missed Equated Monthly Installment (EMI) or RD payment will be reported to CIBIL within just seven days. This means that even a short delay in your payment can lead to a noticeable impact on your credit score.
Your CIBIL score is a critical factor in determining your creditworthiness. A lower score can make it challenging to secure loans in the future or result in higher interest rates. Timely payments are essential to maintaining a healthy credit score, as they demonstrate your financial discipline and reliability to lenders.
To avoid the negative impact of the 7-day reporting rule, it is vital to stay vigilant about your payment schedules. Visit the Bajaj Finserv Service Portal to monitor your payment statuses and ensure you never miss a due date.
The timeline of default: From day 1 to day 90 (NPA)
Missing a loan installment sets off a chain reaction of consequences that escalate over time. Below is a detailed breakdown of what happens from the first day of default to the 90th day:
Day 1–30: Initial reminders and minimal penalties
- The lender sends reminders via SMS, email, or calls to notify you about the missed payment.
- A small penalty or late fee may be levied, depending on the terms of your loan agreement.
- Your credit score remains unaffected during this period if the payment is made promptly.
Day 31–60: Escalation of penalties and credit score impact
- The lender may increase the penalty charges for continued non-payment.
- You may start receiving collection notices or calls from the lender.
- Your credit score begins to decline as the missed payment is reported to CIBIL.
Day 61–90: Non-Performing Asset (NPA) status
- The loan account is classified as a Non-Performing Asset (NPA) if the payment remains unpaid for 90 days.
- The lender may initiate legal or recovery actions to recover the dues.
- Your credit score suffers significant damage, making it challenging to secure loans in the future.
Understanding this timeline can help you act swiftly to avoid further complications.
Monetary hit: Breaking down penal charges and GST on missed EMIs
Missing a loan or RD installment not only impacts your credit score but also results in monetary penalties. Below is a breakdown of the potential charges you may incur:
| Type of Charge | Description | Amount/Rate | Example |
|---|---|---|---|
| Late Payment Fee | Charged for missing the due date. | Up to 2% of EMI amount | If EMI is Rs. 10,000, late fee = Rs. 200. |
| Penal Interest | Additional interest on overdue amounts. | 2%–4% per month | If overdue amount is Rs. 5,000, penalty = Rs. 100–200 per month. |
| GST on Penalties | Applicable on late payment fees and penalties. | 18% | If penalty is Rs. 200, GST = Rs. 36. |
To avoid these financial setbacks, it is advisable to review the Bajaj Finserv Fees and Charges section for detailed information. You can also track your missed installment penalties through your Bajaj Finserv account portal for better clarity.
What happens if you miss paying RD installment? (The savings trap)
Recurring Deposits (RDs) are a disciplined way to save money, but missing an installment can disrupt your financial goals. When you fail to contribute to your RD account, the following consequences may occur:
- Penalty Charges: Most financial institutions impose a penalty for every missed installment.
- Loss of Interest: The interest earned on your RD may reduce, affecting your overall savings.
- Account Closure: Repeated defaults can lead to the premature closure of your RD account, resulting in a loss of accumulated benefits.
To recover from a missed RD payment, consider depositing the overdue amount as soon as possible and setting up auto-debit instructions to avoid future lapses. Use the Bajaj Finserv App to easily manage and monitor your RD contributions.
