1. Credit Score Goes Downhill
The credit score is one of the most important factors every lender checks while offering money to a borrower. The lender refers to the credit score and report generated by CIBIL or any other credit rating agencies. It is here that the decision to grant the loan application is either accepted or rejected based on their credit score ratings. In case your score is on the lower side, the lender may not be interested to help you. You will also be disentitled to a future loan until the default is cleared. Therefore, always try to pay off the overdue as quickly as possible to prevent your credit score from taking a hit.
2. Constant Calls From Banks
When you apply for a personal loan, you need to be responsible enough to repay it on time. And once you fail to repay the borrowed amount by the end of the month, you will start receiving back-to-back calls from the lender or the lending institution. A slip of one or two EMI repayments is always allowed. But if the issue persists, the lender may start sending out reminders in the form of calls, SMS, email, or app notifications urging them to pay soon.
3. Legal Notice Can Be Imposed
When you take an instant personal loan, you must provide blank cheques as collateral for the loan amount. The lender will submit your cheques to the bank given that you are now unable to repay the loan amount. If the checks are returned due to inadequate balance, the legal division of the lender will issue you a legal notice asking you to pay the penalty within a stipulated date.
4. Court Case Can Be Filed
In case you are still unable to repay your personal loan, the lender or lending institution will initiate a lawsuit against you to obtain the money. You will be left with two options to come out of this situation. First, to pay the debt in full, or second, to reach for an out-of-court settlement with the creditor.
5. Regular Visits From Recovery Agents
Every financial firm has a recovery division that is in charge of collecting debts from customers who have fallen behind on payments. These agents will visit you at your home or place of business and demand that you repay the sum as quickly as possible.