Outlook Money
Having a loan repayment default can lead to long-term financial consequences and can impact the credit rating and future loan borrowing prospects too.
If the borrower fails to pay EMI, additional charges and penalties are added, which further increase the repayment amount.
A low credit score can decrease one's chances of a loan application being approved. It can increase the rate of interest which can have stricter repayment terms.
If repayment is missed, the lenders can take the case in court and the legal proceedings can result in court orders, seizure of assets, or even wage garnishment, wherein a part of the income of the borrower is legally deducted for settling the debt.
It is advisable to seek financial assistance from advisors and avoid repayment defaults.
Compiled by Syed Muskan