Personal Loans are readily available funds when you are undergoing a financial crunch. There is no restriction on the end use of these funds. Since these loans are unsecured (collateral-free), borrowers do not worry about losing their assets due to non-repayment. However, non-repayment of Personal Loan EMI is a legal offense and can have negative after-effects. 

This article discusses the possible scenarios of what happens if you take an instant Personal Loan in Hyderabad or any other city but do not pay the EMIs on time. 

Personal Loan EMI – A Brief Introduction

Personal Loan EMI consists of two elements – principal and interest. 

Principal refers to the amount you avail of as an instant Personal LoanIt usually ranges between ₹1 lakh to ₹30 lakh. 

Interest refers to the extra charge you pay for getting the loan money. Personal loan interest rates usually start from 10.99%, depending on the borrower’s credit score, monthly income, age, and other factors. 

The EMI or Equated Monthly Instalment refers to the monthly amount you need to pay. While a portion of the EMI goes for principal repayment, the other part goes for interest repayment. 

5 After-Effects of Non-Payment of Personal Loan EMI

Here are the possible scenarios of what can happen if you do not repay the EMIs of an instant Personal Loan in Hyderabad.

Credit Score

The credit score is a significant determinant for loan approval. Securing a collateral-free loan’s approval is almost impossible without a good credit score. 

Loan repayments play a significant role in increasing/decreasing loan EMIs. If you repay Personal Loan EMIs on time, your credit score rises substantially. But every time you fail to repay within the due date, the credit score decreases by fifty (50) to seventy (70) points.  


Every small or big loan-related financial transaction gets reported to credit rating bureaus.. So, whenever you apply for a loan, your lender fetches your loan transaction history, including missed/deferred Personal Loan EMI payments from a credit rating bureau before approving the loan. 

If you have missed a few EMIs, the chances of securing the loan approval will decrease. So, ensure that you always pay the EMI of instant Personal Loans in Hyderabad to keep your creditworthiness intact.   

Penalty/ Fine

Besides decreasing your credit score and lowering your creditworthiness, your lender may charge you with a massive fine or penalty. Moreover, the lender will charge a late fee when you repay the missed Personal Loan EMI. 

Generally, the additional fee and penalty range between 1- 3% of the missed EMI amount. However, depending on your loan history, the lender may charge an even more considerable amount.  

Paying the EMI of an instant Personal Loan in Hyderabad on time is wise if you want to avoid paying fines and penalties. 

Recovery Agents 

After you miss a few Personal Loan EMIs, your lender will transfer your case to the loan recovery department. Recovery agents will constantly call and push you for the loan EMI, which can be stressful. 

Make sure you repay the EMI of your instant Personal Loan in Hyderabad to avoid such problems and stress. 

Legal Notice

If the loan recovery department fails to recover the outstanding Personal Loan EMI from a borrower, they file a case in an appropriate court. 

The court sends a summon to the defaulter. The defaulter is given a date on which they must attend the court to prove their point. If the court is unsatisfied with the response, it may recommend a steep fine along with the loan dues and a jail term.

So, to avoid being served with a legal notice or jail term, pay the EMI of your Personal Loan on time.


An instant Personal Loan in Hyderabad can be a lifesaver when you need urgent money. However, non-repayment of Personal Loan EMI can invite the problems mentioned in this article. Hence, evaluating your loan repayment capability well before applying for a Personal Loan and choosing the best NBFC, like Poonawalla Fincorp, offering the best interest rates, is wise.

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