INCOME TAX21 Sept 2026
EMI bounce can incur penalty, lower credit score; is there a grace period before it's reported to credit bureaus? | Mint
A failed EMI (equated monthly instalment) auto-debit can cost you a bounce charge and hurt your credit score. Under Reserve Bank of India's (RBI) 2023 guidelines, lenders must tell you the grace period, usually about seven days, before reporting a missed payment. That window applies only to your first miss. So keep funds ready ahead of the debit date and check your NACH mandate is correct.
Key Statutory Highlights
- When a lender's attempt to auto-debit your scheduled EMI fails, you may have to pay a bounce charge and the missed payment can be reported to credit bureaus.
- Under RBI's 2023 guidelines on penal charges, lenders must communicate a grace period, typically around seven days, before reporting a missed EMI, but only for a one-time miss.
- A bounced EMI reported to a bureau like CIBIL can drop your credit score by around 30 to 100 points, and payment history carries roughly 35% weight in most credit scoring models.
Actionable Advice for Taxpayers / Founders:Keep enough balance in your account before the EMI debit date and check that your NACH mandate is linked correctly. If one EMI does bounce, use the grace period your lender tells you about to clear it quickly and ask the lender about any charges.
Statutory Disclaimer: TaxQue Shorts are AI-assisted editorial briefs for compliance awareness. This brief has not passed every source check; confirm the original notification before acting. This does not constitute formal legal or CA counsel.
TaxQue News Desk
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