You may face penalty for missing EMI by 1 day:Steps to take immediately if auto-debit fails

If you have forgotten your loan EMI due date and the payment is one day late, the first question that comes to mind is whether this will immediately lower your CIBIL/credit score. The answer is that although there may not be an immediate major impact on your credit score, avoiding penalties and late fees may be difficult. Borrowers often assume that banks will ignore a one-day delay or that they will not be charged late-payment fees if they are given a grace period. According to Reserve Bank of India rules and experts, even a one-day delay in a loan payment can put your account in the overdue category. Will there be a penalty if your EMI is one day late? Yes, late-payment charges may apply even for a one-day delay. Even if the bank offers you a grace period, it is not obliged to waive the late fee or penalty. The charges will depend on the terms of your loan agreement. Banks cannot charge interest on penalty charges Banks cannot add the penalty amount to your original loan and charge interest on it again. Penalty charges are completely separate from regular interest. When does your credit score worsen? What should you do if auto-debit fails? If your EMI is set up for auto-debit from your account (NACH/ECS) and the payment bounces because of insufficient balance in the account or a technical problem… How can you protect your credit score after missing an EMI? What is DPD in a CIBIL score? When you download your credit report, it contains a DPD section. If it shows ‘000’, it means you have made all your payments on time. If it says ‘030’ or ‘060’, it means you made the payment 30 or 60 days late. Any number other than ‘000’ reduces the likelihood of getting a new loan in the future.