An arrear EMI refers to an instalment that was due but has not been paid on the scheduled date. In simple terms, it is an unpaid or overdue EMI that remains outstanding on the loan account.
An EMI may become an arrear because of insufficient funds, a missed payment date or a failed auto-debit instruction. The overdue amount can continue to remain on the account until it is paid according to the applicable terms.
Borrowers should regularly review their loan account and address overdue payments promptly to avoid further complications.
How does an EMI become an arrear
An EMI generally becomes an arrear when the scheduled payment is not successfully received on the due date.
Common reasons include:
- Insufficient balance in the bank account.
- Failed NACH or e-mandate transaction.
- Missed payment by the borrower.
- Technical or banking issues.
- Incorrect bank account details.
Understanding the reason behind the missed payment can help borrowers take corrective action and prevent future payment issues.
Arrear EMI vs overdue EMI: Is there a difference
| Particulars | Arrear EMI | Overdue EMI |
|---|---|---|
| Meaning | Unpaid EMI from a previous due date | EMI that remains unpaid after the due date |
| Payment status | Outstanding | Outstanding |
| Amount payable | Includes the missed instalment | Includes the unpaid instalment and applicable charges, if any |
| Usage | Commonly used in loan servicing | Commonly used in repayment tracking |
In practice, the two terms are often used interchangeably.
How can you check your arrear EMI amount
You can generally check your arrear EMI amount through the available service channels.
These may include:
- My Account portal.
- Mobile application.
- Loan statement.
- Customer care support.
- Branch assistance.
Before making a payment, review the outstanding amount and any additional charges that may apply according to your loan terms.
