During a financial crunch, loans come as a blessing. Aren’t they? They are a great help to deal with unexpected expenses. Though loans are helpful, sometimes repayment is challenging, leading to overdue payment amounts that keep them stuck in a debt circle. The interest on various debts quickly mounts into overwhelming figures. One must understand that missing payments on current loans and allowing credit card bills to rack up will add to the individual's financial obligations and multiply at faster speeds than one can expect. In that case, opting for a Personal Loan to pay off the overdue loan would be a good idea.
Overdue could include skipped EMIs, credit card bills, or overdrafts on loans or bank accounts. Irrespective of what is overdue, a Personal Loan can help clear all these obligations and make the borrower debt-free if used efficiently.
What is the Overdue Amount?
These days, loans have become easy funding sources that people can use to cover various expenses in their lives. Whether they need funds for a wedding, medical emergency, education, vacation, or home renovation, they don't hesitate to borrow a loan, fulfill their needs, and repay it to the lender in affordable EMIs with applicable interest. However, unforeseen circumstances make it challenging for borrowers to repay the loan on time. The amount they fail to repay on time is called the overdue amount in loan. In Hindi, it's called ‘atidey raashi’.
Once the borrower misses the deadline, the lender starts charging overdue penalties on a daily or monthly basis. If the debtor does not make the payments for a long time, the outstanding amount gets bigger with time due to additional interest and various penalties. The overdue concept remains the same for all loan types, as every credit one borrow must be repaid by the due date.
Also Read: 6 Ways A Personal Loan Can Help You Manage Your Big-Ticket Purchases? Impact of Overdue Payment
Now that you understand the overdue meaning in Hindi and English, look at its effects on a person’s financial life.
- Reduced Credibility
If the borrower fails to pay an EMI on time, the lending company reports it to the credit bureaus, which eventually reflects in the credit report. Although a single missed EMI has a negligible effect on the credit report, several missed EMIs count as NPA (Non-Performing Asset) and appear as a default. It ultimately affects the credit score and reduces an individual’s Personal Loan eligibility.
- Loss of Security
If the loan is secured, the overdue amount might result in the loss of security. If the borrower does not pay the EMIs for a few months, the lender sends reminders and notices to clear the outstanding balance. If the borrower does not repay the missed EMIs within the notice period, the lending company has the legal right to seize the collateral and sell it to recover its loss.
How Does a Personal Loan Help Clear the Overdue Payment?
Personal Loan is an unsecured loan that borrowers can use at their discretion. It can be very helpful in settling down the overdue amount of any previous loans. Those with overdue amounts on several loans can consolidate their debt with a Personal Loan at lower interest rates and close other accounts while paying EMIs for the new loan. However, remember that the borrower will still be in debt and must evaluate their repayment capacity before applying for a Personal Loan.
Personal Loans are convenient solutions for borrowers looking to consolidate their past-due payments. These unsecured funding options have competitive interest rates that can help manage debts and payments. Depending on what overdue amount is, an ideal strategy is to pay off the high-interest debt first and then clear low-interest loans. Borrowers with considerable due payments will find Personal Loans the best choice to pay off their debt and save money on the interest cost.
Benefits of Making Overdue Payment Using a Personal Loan
Those who fulfil the NBFC’s qualifying requirements and maintain a good credit score can acquire a Personal Loan instantly. Many lending institutions offer the option of online application. Unlike other loan types, Personal Loans have no end-use restrictions and allow borrowers to use them for any purpose they want. If an individual needs money right away, an instant Personal Loan can be the most convenient way to receive cash.
Since Personal Loans are unsecured funding options, they do not require any collateral and are easier and faster to obtain. Most Personal Loans have fixed interest rates, meaning the EMIs will remain the same throughout the loan tenure. Therefore, borrowers do not need to worry about fluctuations in the market interest rates.
Personal Loans Make Overdue Loan Payments Easier in Many Ways as follows:
- The borrower can seek a loan amount according to their due balance. An ample loan amount helps the borrower tackle the outstanding balance and bring the finances back on track.
- Personal Loans have no end-use restrictions, allowing borrowers to repay their outstanding loans conveniently without incurring any hefty charges.
- Instant approval and fast disbursal are the major attractions of Personal Loans. Online application, no collateral requirement, and complete digital procedure help an individual raise funds instantly. That means they can repay their debt immediately and clear their outstanding balances.
Personal Loans are easy to obtain and significantly aid in debt consolidation. Clearing the past overdue payment with a Personal Loan is a safer option than letting it rack up. Apply for a Personal Loan for debt consolidation with Hero FinCorp now and resolve the condition at the earliest.
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