4 Things to do When You Cannot Pay Your EMIs 

Gone are days when taking a loan or asking for credit was a cumbersome process, loans provide for financial needs which individuals are not able to meet on their own. As much as the disbursal of loans have increased, the banks and other lending institutions are staring at growing bad loans.

Defaulting on loans could be due to a number of reasons: ranging from loss of job or personal pressures that require the funds that you have already allocated for EMIs. Missing your monthly EMIs could make you a defaulter and successive missing on payments would adversely affect your credit score.

If you are in a similar state and are looking for solutions or what to do, then you have come to the right place.

But remember, you are not alone, and you are not the first person to be in this situation.

Option 1: Situation

Do not panic! You have not paid your dues and you would the recipients of notifications from your lender. Get your papers or documents in order. This should contain details like your loan amount, the tenure, interest rate, monthly EMI, record of EMIs previously paid etc.

Once you have taken stock of the situation, you can proceed to explain the situation to your lender, providing them with reasons for missing payments and assurance on future payments.

Option 2: Grace Period

Ask the bank for grace period stating that you have been paying your EMIs regularly but due to said reason like loss of job etc. you are unable to pay your loans. Your preparation of all the documents and statement will help you here. The bank may consider your situation seeing that you are a genuine borrower might grant you the grace period with some penalty.

Option 3: Restructuring

Upon situation analysis and in consultation with your bank or lender you might be able to come to arrive at how your immediate future with respect to loans look.  You could look at refinancing through another lender.

Another option is restructuring through which you could extend the tenure of your existing loan. As an immediate solution you can look at part payments on your EMIs and get some relief, but remember that part payments are not advisable always.

Option 4: Liquidate Your Assets

Another option is try and liquidate assets to pay off your debts, but this is not something we suggest and should be done after much deliberation. Liquidating shares, Fixed deposits or other investments could help in payments of loans.

 Prevention is better than cure, although this article provides you with options that help you deal with situations where you find yourself as a defaulter; do realize that keeping your date with loan payments/ EMIs every month is a very important activity and it is a good habit to inculcate.

It also fits in with the idea of good credit health and brings a sense of responsibility, because as we say here in CreditMantri: Credit Healthy toh Credit Wealthy

Additional Reading: 5 ways to cut EMI cost


Missing your payments on EMI is not the end of the world. At the most it will affect your credit score a little bit, but it is better to negotiate with the bank and pay off the debts or come to an agreement than have defaulter status on your credit report which will prevent you from getting any more loans. Banks are there to help you as they are affected as much as you are if you do not pay your debts.

Take your time, control your spending and pay off your debts.