Missed a home loan EMI? Here's the credit and cost impact you should know

Experts explain penalties, credit score hit and when NPA risk begins

A delayed home loan EMI often triggers more anxiety than actual damage, but experts caution that inaction can prove costly.

 

When does it hit your credit score?

Most lenders report repayment behaviour in 30-day cycles. “Once an EMI crosses the 30-day mark, it is typically marked as ‘30 days past due’ (DPD), which becomes visible on the borrower’s credit report,” says Sarika Shetty, co-founder and chief executive officer, RentenPe.

 

She adds that such delays are usually reported to bureaus such as Cibil, Experian, CRIF and Equifax. A single 30-day or longer miss can lower a credit score by 50–100 points, depending on past history.

 

Manoj Puravankara, co-founder and group chief operating officer, Atom Privé Financial Services, puts the potential impact slightly wider. Even one 30+ day missed EMI can reduce a strong score by 50 to 150 points, he says, adding that “the financial cost of the penalty may be small, but the reputational cost in credit terms is significant”.

 

What will it cost in rupees?

Banks typically levy penal interest over and above the contracted rate. According to Shetty, late payment charges are often 1–2 per cent, with penal interest of 2–4 per cent per month on the overdue amount.

 

Puravankara illustrates this with numbers: on a Rs 50,000 EMI, a 30-day delay at a 2 per cent penal rate could add roughly Rs 1,000 in extra interest, apart from ECS or auto-debit bounce charges of a few hundred rupees. Even at 60 days, the incremental interest remains modest in absolute terms, but the credit implications worsen.

 

When does it become serious?

Under Reserve Bank of India prudential norms, a home loan is classified as a non-performing asset (NPA) if instalments remain overdue for more than 90 days.

 

Before that, the account moves through structured recovery stages. Automated reminders begin first. After 15–30 days, calls and written communication escalate. Once the delay crosses 30 or 60 days, dedicated recovery teams may step in. Formal NPA classification occurs only after the 90-day threshold.

 

What should borrowers do immediately?

“The most important step is immediate communication,” says Puravankara. Informing the lender before or soon after the due date can prevent escalation and reduce the risk of slipping into the 30-day DPD category.

 

Shetty advises borrowers to contact the lender, discuss restructuring or partial payments, document all communication, and prioritise clearing the dues. Proactive engagement, she notes, can sometimes result in waived penalties and reduced credit damage, as lenders prefer resolution over default.

 

One missed EMI is manageable, repeated silence is not.