Question Detail

I have taken a loan of Rs 4 lakh from a public sector bank (PSB). I have not been able to pay the equated monthly installments (EMI) for five continuous months. My EMI is Rs 5000. Now, if I want to make the payment of all the five months together what will be the overdue charges?

By Suresh Chand On May 30 2017 11:52PM

Answered by

There are a number of charges that can be levied:
Penalty charge
A PSB normally charges a penal rate of 1 to 2 per cent of your EMI if it remains unpaid for 30 days after the due date. So, you will have to bear this charge on the months when you defaulted your payment.
Cheque bounce charge
In case you have given post dated cheques (PDC) for your EMI payments and your account has had insufficient funds then you would have to pay additional bounced cheque charges too. This charge can range anywhere between Rs 250 to 400. In case of electronic clearing system, the penalty will be between Rs 100-150.
Now, if you are planning to make the payment of all the defaulted five installments together, you will be paying the charges as explained in the table below.
Miscellaneous charges
Apart from the above charges, there might be other miscellaneous charges that may marginally increase the amount. Also, in case of consecutive defaults banks have the right to increase the interest rate. Since you signed the agreement while taking the loan, you will not have much say in this. If such a situation arises, it may alter the complete nature of your debt situation.


Jun 1 2017 10:42PM