Overdue Payment: Meaning, Reasons, Consequences and More

What are the Causes of Overdue Payments?

A payment overdue may happen due to any of the following reasons:

Cash Flow Issues: Issues in the cash flow are one of the most common reasons for an overdue payment. It simply means that the actual cash available with you to repay the EMIs is insufficient due to delayed salary, loss of job, divorce, medical emergency, etc. 

Human Error: Overdue due to this reason may happen if you do not stay vigilant in timely EMI payments before the due date. It often happens when you do not opt for automatic EMI deductions from your bank account or do not maintain sufficient balance. 

What are the Consequences of Overdue Payments?

Now that you understand the overdue amount meaning, here are its consequences:

• Notice from the Loan Company: Initially, the lender sends routine reminders to clear the overdue payment. Afterwards, they send a written notice with a final date to pay, after which they can take legal action.
• Late Payment Penalties: The lender may charge hefty penalties if you have multiple unpaid EMIs. The penalty may be a small percentage of each unpaid amount.
• Loss of Collateral: If you borrow a secured loan against a property, the lender has the legal right to foreclose the property and sell it to recoup the overdue amount. Thankfully, instant Personal Loans are unsecured credit that does not require any collateral as security.
• Legal Action: For unsecured loans, the lender may take the matter to the court. 
• Credit Score: Your credit score will take a hit with each missed EMI.
• Increased Interest Rate: With a reduced credit score, lenders may charge higher interest rates for future loans.

How to Recover Overdue Payment?

Here is a strategic approach to recovering overdue payments:

Evaluate Your Finances: Assess your present financial situation to calculate how much you can afford to pay immediately towards the overdue payment.

Contact the Lender: Approach your lender to describe your financial condition. Based on your current situation, the lender may offer you a temporary relief or an easier repayment solution to support you on your way back to track. Moreover, the lender may also provide you with a payment restructuring or an extension to make prompt repayments. You may also consider debt consolidation with instant Personal Loans to clear your dues immediately. Loan settlement is the last resort, where you pay a portion of the due amount to the lender.

Create a Repayment Plan: Discuss with your loan provider to devise a repayment plan suitable to your financial capacity. Try your best to stick to this repayment plan diligently. 

Outstanding Payments Vs Overdue Payments

How Personal Loan can help you clear an Overdue Payment?

A Personal Loan can help you clear an overdue payment with debt consolidation. If you have multiple overdue payments, you can consolidate them with a Personal Loan and repay its EMIs more conveniently, usually at a lower interest rate. Here is how a Hero FinCorp Personal Loan helps:

• Instant amount of up to Rs 3 lakh
• Attractive interest rates 
• Convenient repayment terms of up to 36 months
• 100% digital loan application and processing 
• Simple eligibility conditions and minimal documentation requirements
• Instant approval and quick disbursal
• No collateral requirement 
• No end-usage restrictions

How to Apply for a Personal Loan Online?

Follow these steps to apply for a Personal Loan with Hero FinCorp:

• Visit the official Hero FinCorp website or download the instant Personal Loan app.
• Fill out an online loan application form.
• Scan and upload the necessary documents.
• Wait for approval and review the loan offer carefully.
• Accept the loan offer to get disbursal directly into your bank account.

Conclusion

Now that you know the overdue payment meaning, try to make your payments before the due date to avoid its consequences. Apart from affecting your reputation and credibility, it also attracts additional charges and legal action. To clear overdue payments, approach Hero FinCorp to borrow a debt consolidation loan at attractive interest rates and quick loan procedures.

Frequently Asked Questions

1. How can I pay overdue EMI?

Borrowing a Personal Loan is the best way to pay your overdue EMIs.

2. What is overdue money?

Overdue money is the amount you were supposed to pay by the due date but have yet to pay.

3. What is overdue payment and outstanding payment?

Outstanding payment is an amount you are supposed to pay by a due date, while overdue payment is the amount you did not pay by its due date.

4. What is overdue in loan?

Missed EMIs lead to overdue in loan. Every loan has a fixed repayment schedule. It has a due date before which you must pay the EMI. If you cross that date without paying the EMI, it causes an overdue in loan.

5. How can I postpone my EMI for three months?

Approach the lender to request a pause in the repayment schedule or request a loan restructuring according to your financial situation.