What Are Personal Loan EMI Bounce Charges

What Are Personal Loan EMI Bounce Charges

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A personal loan is an unsecured financial product that provides a lump sum of money for various needs, such as home renovation, higher education or any large purchases. It is repaid in fixed monthly instalments over a set term, with interest rates varying based on creditworthiness and lender terms. Missing an EMI can result in bounce charges, which are penalties for failed payments. 


These charges typically include a fixed fee or a percentage of the EMI amount and are added to your loan balance. Beyond immediate financial penalties, missed payments can damage your credit score, leading to higher interest rates and difficulties in securing future credit. Managing your personal loan responsibly and ensuring timely EMI payments is crucial to avoid these charges and maintain a healthy credit profile.


Don’t let bounced EMIs harm your credit! Check offer in 2 steps for quick funds and learn how to manage your EMIs without penalties. Smart borrowing starts here.


What are personal loan EMI bounce charges?


Personal loan EMI bounce charges are penalties you pay when an EMI (Equated Monthly Instalment) fails due to low funds or other issues. Lenders add a fixed fee or a small percentage of your EMI to your outstanding balance. Bounce charges raise your total repayment and can hurt your credit score if they happen often.


Why it matters: Even a one-time missed payment can add extra costs and lower your CIBIL score, making future loans pricier or harder to get.


What are the charges for EMI Failure?

When an EMI payment fails, lenders usually charge one of two ways:

  • A flat bounce fee (e.g., Rs. 500)
  • A percentage of your EMI amount (e.g., 1–2%)

These penalties get added to your loan balance, so you end up paying more over time.


Additional read: personal loan interest rates

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What happens if a personal loan EMI bounces?

A bounced EMI can lead to:

  • Penalty fees: Added to your outstanding balance.
  • Higher interest rates: Lenders may raise your rate after repeated bounces.
  • Credit score drop: Missed payments get reported to credit bureaus, lowering your score.
  • Legal action: Continued defaults can lead to court cases and extra costs.


 

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How can I stop EMI bounce charges?

Follow these steps to prevent EMI bounces and keep your loan on track:

  • Keep enough balance: Always maintain sufficient funds in your account.
  • Auto-debit setup: Use auto-debit to automate EMI payments on the due date.
  • Monitor your account: Check balances and statements regularly to catch issues early.
  • Update payment details: If you change banks or cards, inform your lender right away.
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Long-term effects on credit score

Bounced EMIs can hurt your credit over time:

  • Lower credit score: Repeated bounces drag your score down, affecting future credit approvals.
  • Higher future rates: Lenders charge more interest to borrowers with poor repayment histories.
  • Tougher approvals: Banks may reject applications from those with frequent defaults.
  • Potential legal issues: Continued non-payment can lead to lawsuits and further financial trouble.


Conclusion

Understanding personal loan EMI bounce charges helps you manage your loan wisely and avoid extra fees. Always plan your finances, use auto-debit, and keep track of your payments to stay penalty-free. Remember, timely EMIs keep your credit score healthy and your borrowing costs low.


 

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Key offerings: 3 loan types

  • Flexi Hybrid Term Loan
  • Flexi Term Loan
  • Term Loan

  • Withdraw and prepay – no extra charges
    You can withdraw from your limit and prepay as many times as you want, without extra charges.

  • Instalment pattern
    You can pay interest-only EMIs for up to 24 months, after which, the EMI will consist of both, the principal and the interest. EMI is applicable only on the withdrawn amount.

  • Flexi facility charges
    Flexi facility charges applicable based on your loan amount.

  • Withdraw and prepay – no extra charges
    You can withdraw from your limit and prepay as many times as you want, without extra charges.

  • Instalment pattern
    Fixed EMIs that cover both the principal and interest on the loan amount you withdraw.

  • Flexi facility charges
    Flexi facility charges applicable based on your loan amount.

  • Amount disbursed in one go
    The entire loan amount is disbursed at the start.

  • Instalment pattern
    Fixed EMIs that cover both the principal and interest.

  • Flexi facility charges
    No Flexi facility charges.

Personal loan interest rate and applicable charges

Type of fee

Applicable charges

Rate of Interest per annum

10% to 31% p.a.

Processing fees

Up to 3.93% of the loan amount (inclusive of applicable taxes).

Flexi Facility Charge

Term Loan – Not applicable

Flexi variant - A fee will be deducted upfront from the loan amount (as applicable below)

  • Up to Rs. 1,999/- for loan amount less than Rs. 2,00,000
  • Up to Rs. 3,999/- for loan amount from Rs. 2,00,000 to Rs. 3,99,999
  • Up to Rs. 5,999/- for loan amount from Rs. 4,00,000 to Rs. 5,99,999
  • Up to Rs. 7,999/- for loan amount from Rs. 6,00,000 to Rs. 9,99,999
  • Up to Rs. 8,999/- for loan amount from Rs. 10,00,000 to Rs. 14,99,999
  • Up to Rs. 9,999/- for loan amount from Rs. 15,00,000 to Rs. 19,99,999
  • Up to Rs. 10,999/- for loan amount from Rs. 20,00,000 to Rs. 24,99,999
  • Up to Rs. 11,999/- for loan amount from Rs. 25,00,000 to Rs. 29,99,999
  • Up to Rs. 12,999/- for loan amount of Rs. 30,00,000 and above

*All the Flexi facility charges above are inclusive of applicable taxes

*Loan amount includes approved loan amount, insurance premium, and VAS charges.
Principal Holiday Facility Fees
  • Up to Rs.1999/- for loan amount less than Rs.2,00,000
  • Up to Rs.3999/- for loan amount from Rs. 200000 to Rs.399999
  • Up to Rs.5999/- for loan amount from Rs. 400000 to Rs.599999
  • Up to Rs.7,999/- for loan amount from Rs. 600000 to Rs.999999
  • Up to Rs.8,999/- for loan amount from Rs.10,00,000 to Rs. 1499999
  • Up to Rs. 9999/- for loan amount from Rs. 15,00,000 to Rs.19,99999
  • Up to Rs.10,999/- for loan amount from RS. 20,00,000 to RS.2499999
  • Up to Rs.11,999/- for loan amount from RS.25,00,000 to RS. 29,99999
  • Up to Rs. 12,999/- for loan amount of Rs.30,00,000 and above

Above charges are inclusive of applicable taxes & will be deducted upfront from loan amount

*(Loan amount includes approved loan amount, Insurance Premium & VAS Charges)

Bounce charges

Up to Rs. 1,200 per bounce.
“Bounce charges” shall mean charges for (i) dishonour of any payment instrument; or (ii) non-payment of instalment (s) on their respective due dates due to dishonour of payment mandate or non-registration of the payment mandate or any other reason

Pre-payment charges

Full pre-payment

  • Term Loan: Up to 4.72% (inclusive of applicable taxes) on the outstanding loan amount as on the date of full pre-payment.
  • Flexi Term Loan (Flexi Dropline): Up to 4.72% (inclusive of applicable taxes) of the total withdrawable amount as per the repayment schedule as on the date of full prepayment.
  • Flexi Hybrid Loan: Up to 4.72% (inclusive of applicable taxes) of the total withdrawable amount as per the repayment schedule as on the date of full prepayment.

Part pre-payment

  • Term Loan: Up to 4.72% (inclusive of applicable taxes) of the principal amount of loan prepaid on the date of such part pre-payment.
  • Not Applicable for Flexi Term Loan (Flexi Dropline) and Flexi Hybrid.

*Foreclosure will be processed post clearance of first EMI

Penal charge

 Delay in payment of instalment(s) shall attract Penal Charge at the rate of up to 36% per annum per instalment from the respective due date until the date of receipt of the full instalment(s) amount.

Stamp duty (as per respective state)

Payable as per state laws and deducted upfront from loan amount.

Annual maintenance charges

Term Loan: Not applicable

Flexi Term Loan (Flexi Dropline): Up to 0.295% (inclusive of applicable taxes) of the total withdrawable amount (as per the repayment schedule) on the date of levy of such charges.

Flexi Hybrid Loan: Up to 0.295% (inclusive of applicable taxes) of the total withdrawable amount during the initial tenure. Up to 0.295% (inclusive of applicable taxes) of total withdrawable amount during subsequent tenure.

Broken period interest / Pre-monthly Instalment interest

Method of recovery of "Broken Period Interest/Pre monthly instalment Interest" would be as follows:


EMI Date : 2nd

Scenario 1: If Loan is disbursed on 1st or post 10th of the month:

For Term Loan: BPI amount will be capitalised, i.e added to Principal amount on Due date / Deducted from disbursement
For Flexi Loans: BPI amount will be capitalised, i.e added to Principal amount on Due date / Added to first instalment

Scenario 2: If Loan is disbursed between 3rd and 10th of the month:
First instalment will consist of interest for actual number of days

Note: Additional cess if any, will be applicable to all charges according to state law.

*Terms and conditions apply.

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Bajaj Finance Limited has the sole and absolute discretion, without assigning any reason to accept or reject any application. Terms and conditions apply*.