What Happens If Emi Bounces

When your EMI bounces, you will have to pay a late payment fee and EMI bounce charges. 

When you take a loan, the lender asks for a NACH Mandate or an ECS for the monthly EMI payments. The EMI amount is directly debited from your bank account. Some lenders also accept PDCs for the EMI payment. This avoids hassle for the borrower to pay the EMI every time, to remember the payment date, etc., 

So, when the NACH mandate, ECS or the cheque fails to clear, you will be slapped with ECS bounce charges along with late payment fees. These charges differ from lender to lender and the charges might increase if the payments are not made immediately. 

In the long run, your credit score can get affected negatively. Missing out even one of your EMI payments will bring down your credit score. With your credit score down, availing of new credit in the future will become difficult. There is also a possibility that lenders might follow up and ask you to make the payments. If you fail to make payments in spite of continuous reminders, legal action might be taken against you.

To pay your EMIs regularly, you can start managing your spending accordingly. Making regular EMI payments is better than making late payments and pay additional charges for it.

Additional Reading: 4 Things to do When You Cannot Pay Your EMIs